For years, copyright owners have faced uncertainty as to when they could file a copyright infringement claim. Title 17 U.S.C. § 411(a) states that “no civil action for infringement of the copyright in any United States work shall be instituted until … registration of the copyright claim has been made in accordance with this title.” Courts had been split as to whether this required an issued registration before suit (the “registration approach”), or whether just the act of filing a copyright application satisfied this requirement (the “application approach”).

Last week, the U.S. Supreme Court resolved that question, holding that “registration” occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright. This can mean long delays before filing, as the current administrative backlog at the Copyright Office has resulted in processing times of seven months on average. It also has encouraged many current litigants to withdraw pending lawsuits that had been based on the application approach precedent – including for example the wave of copyright infringement lawsuits filed against the video games Fortnite and NBA2K over dances included in those games.

The most important takeaway from this decision is for copyright owners to register their works early. Expedited application processing is still available through the “special handling” process, but only in certain situations and at a cost of $800 per claim. The Supreme Court also made a point to highlight that the “registration approach” would not deprive owners of substantive rights, because they can still recover damages for infringement that occurred both before and after registration. Early registration can avoid both of these issues and ensure a copyright owner’s ability to promptly bring litigation when the need arises.

The value of technology-driven startup companies is often heavily dependent on a company’s ownership of intellectual property and the value associated with that intellectual property.  Blockchains can serve an important role in proving ownership, usage, and ultimately the value of intellectual property.

Blockchains are a revolutionary technology that use a distributed network of computers (nodes) solving complex cryptography to securely record data and transactions on a ledger.  The ledger can be monitored in real time by all nodes in the network, and can only be edited with the combined efforts of at least 51% of the nodes in the network.  This makes the information stored on blockchains with a substantial number of independent (e.g., peer-to-peer) nodes highly reliable and transparent.  Blockchains will underlay the next generation of data storage and management, and will affect intellectual property in three important ways:

  1. Proving Ownership

Once copyrightable, trademarkable, or patentable work is added to a blockchain, the blockchain will forever provide an auditable record of ownership of the underlying intellectual property – down to the original party that added the intellectual property to the blockchain.  This will facilitate audits of the rights to specific intellectual property, and reduce or entirely remove the need for associated insurance.

  1. Proving value

Blockchains may be programmed to record every time intellectual property is accessed for things such as trademark or patent applications.  They can also record every time intellectual property is accessed by a party other than the owner, which can provide an accurate record of use of the intellectual property that can be efficiently analyzed, assigned a value, and monetized.  This will streamline the ability to accurately value intellectual property in the context of funding rounds, or mergers and acquisitions.

  1. Smart Contracts

Blockchains may be programed to execute complex software and computer codes in a way that ensures every executed line of code is accurately recorded and auditable.  Agreements for intellectual property rights can be coded into and automatically executed by a blockchain.  For example, an agreement whereby one party licenses the rights to use a trademark to another party for monthly payments can be coded into a blockchain, and the blockchain will execute smart contracts to automatically release the appropriate amount of funds each month.  Additionally, the blockchain may monitor the use of the trademark, and automatically revoke the license or increase payments owed if misappropriation of the trademark is detected or the underlying agreement is otherwise violated.

Ultimately, startup companies with significant intellectual property will find blockchains integral in proving ownership and value of their intellectual property, and should consult professionals regarding recording their intellectual property on a blockchain.

The Campbell Soup Company (“Campbell’s”) can now tell its competitors, “No CHUNKY soup for you!”  Earlier this month, Campbell’s earned the United States Patent and Trademark Office’s (“USPTO”) approval to trademark the word “CHUNKY.”  Campbell’s has long used the word to describe its more ingredient-filled soups, but now the Camden, New Jersey-based soup giant can officially add CHUNKY to its extensive list of registered trademarks.  Not only is it a major windfall for a soup company to own the rights to a word often used to describe the texture and look of soup, but it is a rare accomplishment, and Campbell’s has pop culture, its lengthy relationship with the National Football League (“NFL”), and years of successful advertising to thank.

Generally, marks considered merely descriptive of the goods for which they are associated cannot be protected until these marks achieve secondary meaning.  A mark is considered merely descriptive if it describes an ingredient, quality, characteristic, function, feature, purpose or use of the specified goods or services.   Secondary meaning is accomplished when consumers have come to identify a mark with a specific product over time.  While CHUNKY could be a word used to describe the hodgepodge of extra vegetables, pasta, and meat stuffed into some of Campbell’s soups, Campbell’s successfully demonstrated secondary meaning by citing to “massive unsolicited media coverage” of CHUNKY in its trademark application.  Over the years, CHUNKY has been parodied on Saturday Night Live, Family Guy, The Simpsons, and The Daily Show.  Campbell’s also reportedly spent $1 billion in advertising since 1988, including its NFL sponsorship, and put out commercials featuring NFL players like Reggie White and Donovan McNabb eating the CHUNKY line of Campbell’s soup.    Rapper Ghostface Killah referenced the soup in his lyrics to “Murda Goons” (“Leave your brain all chunky like I’m advertising soup from Campbell’s”) and Pulitzer-Prize winning author Colson Whitehead said in his novel, Sag Harbor, “We were Campbell’s men, had been for years, and nothing took the edge off like the talent in their boutique Chunky line…”  Campbell’s also presented a survey showing that 75 percent of consumers associated the word “chunky” with the soup.  In the end, the USPTO agreed that CHUNKY had achieved secondary meaning in the eyes of consumers, and granted Campbell’s the trademark rights.

But what does this mean for other companies looking to possibly use the word chunky to describe food products?  Campbell’s has reportedly said that the word will be limited in connection with soups – not other food products.  For example, a food product called “Chunky Muffins” would not violate Campbell’s trademark.  Additionally, Campbell’s has said that “non-prominent, descriptive” uses of the word, such as “chunky-style,” that are not a trademark, will not be a violation.  Finally, trademark applicants can learn a thing or two from Campbell’s CHUNKY victory.  Trademark applicants should be reminded of the importance of making meaningful and memorable connections with consumers through multiple avenues for not just products, but words used to describe products.  For it is especially through unique and standout marketing that a mark can achieve the secondary meaning necessary to secure an even stronger position in the marketplace.

The United States Patent and Trademark Office (“USPTO”) posted an update on its official website yesterday with information about its activities during the shutdown. Up until this point, the USPTO has been operating through the use of prior-year fee collections. The USPTO now expects that patent operations will continue to function normally until “at least the second week in February”, while trademark operations will continue normally until “at least mid-April 2019”. Applicants and registrants should plan to comply with all outstanding deadlines in pending matters – even if the USPTO is forced to limit activities as a result of the shutdown. While the expectation is that the USPTO website and electronic filing system will continue to function normally and will accept submissions after this timeframe, applicants and registrants should be prepared to make other filing arrangements if necessary.

The issue of intellectual property used within video games is in the news again. If you haven’t already heard, wildly popular video game Fortnite features a dance called “Swipe It” that is the center of a pending lawsuit. Brooklyn-based rapper 2 Milly is claiming he created the dance in 2015 and the game’s creators swiped it from him. 2 Milly, whose real name is Terrence Ferguson, filed the lawsuit in federal court in Los Angeles against Epic Games, the maker of Fortnite, alleging copyright infringement, right of publicity, and unfair competition claims.  Additionally, the lawsuit accuses Epic Games of appropriating several dances in Fortnite (“emotes”) without permission, including Alfonso Ribeiro’s “Carlton Dance” from “The Fresh Prince of Bel-Air” (renamed Fresh), Snoop Dogg’s 2004 dance from “Drop It Like It’s Hot” (retitled “Tidy”), and Donald Faison’s dance from the TV show “Scrubs,” (renamed “Dance Moves”).

2 Milly’s dance, dubbed the “Milly Rock,” consists of a left arm swing, a right arm swing, a circular motion of both arms, and simultaneous alternative hip swings – repeated over and over again.  But is it copyrightable?  To successfully state a copyright infringement claim and collect damages, 2 Milly will generally have to show that he owns a valid copyright to the dance and that Epic Games copied constituent elements of the dance that are original. There is also the question of whether Fortnite’s Swipe It dance infringes on 2 Milly’s brand as an artist. After all, 2 Milly became known and recognized for his Milly Rock dance and gained fame and popularity for it on a viral level. While the Fortnite avatars participating in the dances do not use 2 Milly’s name and do not appear to look like 2 Milly, there could be an argument that the use of Swipe It infringes on the rapper’s likeness and persona as an artist, who is particularly known for a particular dance. On top of all of this, Epic Games gains a commercial advantage by its use of Swipe It since gamers are prompted to pay approximately $9.50 to “unlock” the Swipe It emote on Fortnite.

While a dispute over the ownership of a dance move portrayed in a video game may seem novel, it is part of a long trend of similar past – and most likely future – disputes. Indeed, the 2 Milly lawsuit was followed shortly thereafter by a lawsuit from Alfonso Ribeiro. Copyright infringement lawsuits have been filed and some are currently pending from tattoo artists against video game studios over the reproduction of players’ tattoos in games. College athletes have battled over the unpaid use of their likenesses in college sports video games. Even Lindsay Lohan tried to sue Rockstar Games over the use of a character she says was based on her likeness.

As video games become more realistic and more intertwined with popular culture (and social media), the issues of intellectual property being used within other intellectual property will show their face again and again. This is especially true as game studios push virtual reality and as consumers expect to see their real worlds reproduced faithfully in video game format. Intellectual property licensing has been a part of the video game world for a long time. But as the content being incorporated into those games transitions from traditional properties like music and brands to more nebulous properties like dance moves and personal likenesses, creators on both sides of the divide need to be aware of their rights and need to be aware of where their properties are being used. In many circumstances, the law is unsettled or there are issues of first impression. Creators who sleep on their rights may miss out on potential revenue streams or may risk the loss of their rights to the public domain. Creators who utilize third-party works may face disruptions or event litigation as works they thought were in the public domain are claimed by their creators. Intellectual property licensing is here to stay in the video game world, and those who are aware of this fact and use it to their advantage are more likely to find themselves in the winner’s circle.