The Digital Millennium Copyright Act (“DMCA”) affords an invaluable safe harbor to online “service providers” (as that term is very broadly defined in the DMCA) for copyright infringement claims arising from user-generated content posted to a service provider’s website.  To be eligible, service providers must satisfy several criteria.  For example, service providers must implement a policy for the termination of repeat infringers and comply with certain “standard technical measures” used by copyright owners to identify or protect copyrighted works.   Service providers must also designate an agent to receive notice of claimed infringement.  Although service providers wishing to take advantage of this safe harbor have traditionally designated their agents through a written submission to the United States Copyright Office, in May 2017, the Copyright Office issued a final rule requiring service providers to register their designated agents (or in the case of those already registered, re-register) through a new online system.  The deadline to register with the new online system is December 31, 2017.  The final rule also requires the designation be renewed every three years.  Failure to register and renew will result in a loss of eligibility for the DMCA safe harbor, a risk no service provider should take.

The First Amendment and Trademarks: Protecting “The Thought We Hate”

Can the federal government refuse to register offensive trademarks?  The Supreme Court held yesterday that it cannot.  Although the case did not directly involve the “Washington Redskins” trademark registration, discussed in previous blog articles in this space, it effectively gave the Redskins a victory in their effort to reinstate their trademark registration against efforts to cancel their mark as disparaging.

The Lanham Act governs all federal registration of trademarks.  Since it was enacted in 1946, the Lanham Act has included the “Disparagement Clause,” which prohibits the registration of trademarks “which may disparage . . . persons, living or dead, institutions, beliefs or national symbols, or bring them into contempt, or disrepute.”  In Matal v. Tam, No. 15-1293 (2017), a case sure to have wide-ranging effects, the Supreme Court unanimously held the Disparagement Clause unconstitutional under the First Amendment.

The case involves Simon Tam, the lead singer of a band called “The Slants,” who sought federal registration of “THE SLANTS” trademark.  The band chose its name in an attempt to “reclaim” and “take ownership” of stereotypes about its members’ own Asian ethnicities.  The United States Patent & Trademark Office (“PTO”) rejected Tam’s request to register the mark under the Disparagement Clause, finding “there is . . . a substantial composite of persons who find the term in the applied-for mark offensive.”

The Supreme Court, however, held the rejection of Tam’s registration unconstitutionally discriminated against speech.  The Supreme Court resolved two key issues.  First, it found that trademarks are private speech; not government speech.  Second, the Court ruled that such viewpoint-based discrimination of trademarks is impermissible.

Trademarks are Private, Not Government, Speech

The First Amendment does not regulate government speech.  The general effect of this principle is that the government is not required to give equal time and representation to competing viewpoints when the government itself speaks – in contrast to government regulation of a private person’s speech, which must be viewpoint-neutral.  For example, the government is not required to mount a pro-smoking crusade to balance out its anti-smoking campaign.  In Tam, the PTO argued that the act of approving of a trademark was itself government speech and therefore was not within the reach of the First Amendment.

Justice Alito, writing on behalf of the entire Court, quickly shot down the PTO’s contention, ruling that trademarks are private, not government, speech.  The Court explained that the government does not “dream up” the marks a private party seeks to register: the PTO registers the mark under the Lanham Act based on objective criteria, regardless of the content of the mark.  If registering a trademark is government speech, the Court wrote, then the government is “babbling prodigiously and incoherently” while “expressing numerous contradictory views . . . [and] unashamedly endorsing a vast array of commercial products and services.”  To hold otherwise would disqualify any speech subject to government registration from First Amendment protection.  This would necessarily include copyright protection, with broad and disturbing implications for the speech expressed in copyright-protected writing, art, music, film, and other content.

The Disparagement Clause Impermissibly Discriminates Based on Viewpoint

Having decided that trademarks are covered by the First Amendment’s free speech protection, the Supreme Court went on to find that the Disparagement Clause embodied an unconstitutional discrimination against speech based on its viewpoint.  Although the Court could not muster a five-member majority to agree on the exact reasoning, the Court unanimously disapproved the refusal to register trademarks based on their perceived offensiveness.

As four members of the Court explained, the Disparagement Clause impermissibly authorized the PTO to “favor some viewpoints or ideas at the expense of others.”  “Giving offense,” they wrote, “is a viewpoint.” Because the PTO’s refusal to register “The Slants” was to prevent offense, it ran afoul of “the heart of the First Amendment,” which protects “the freedom to express ‘the thought that we hate.’”  And because the Disparagement Clause impermissibly went further than necessary to achieve the government’s purported goal of preventing discrimination, it was unconstitutional.  A majority of the Court arguably went further, holding that because the Disparagement Clause impermissibly discriminated based on viewpoint, it was subject either to “heightened” or “strict” scrutiny and was therefore invalid regardless of whether it furthered the prevention of discrimination.

The Effects of Tam

The effects of Tam are likely to be comprehensive and wide-ranging.  In invalidating the Disparagement Clause, the Court ruled the PTO cannot refuse to register a trademark because it is disparaging.  This calls into question whether any viewpoint-based discrimination for a business’s trademarks or copyrights will pass constitutional muster.  Most prominently, it is good news for the embattled Washington Redskins, who were under fire when the PTO previously cancelled their registration based on their mark disparaging Native Americans.

Arguably one of the “most vexing” questions in all of copyright law will be answered this year.  Or at least that is what many in the furniture and fashion industry are hoping.

The question is what test should be used to determine when a feature of a “useful article” is protectable under the copyright laws.  As of now, ten different tests have been established by the different federal Circuit Courts of Appeals.  In Star Athletica, LLC v. Varsity Brands Inc., the US Supreme Court is expected to decide which of those tests is the right one, or it could choose another test altogether.

“Useful articles” include furnishings, fixtures, clothing, toys, and many other items including cheerleading uniforms, as presented in the Star Athletica case.  A useful article, in so far as its purely utilitarian features go, is not capable of copyright protection.   However, non-utilitarian features of such items can benefit from copyright protection, if that feature can be identified “separately” and exist “independently” from the useful aspect of the item.  How to determine this – whether the feature is separable in this way – is the question being decided by the Supreme Court.

The articles in the Star case are cheerleading uniforms, and the feature at issue is the two dimensional designs on those uniforms.

Capture

Given the size of some of the industries involved, the Court’s decision could have huge consequences.  Spending on apparel was estimated at more than $250 billion annually in the US alone, and the value of the US furniture market has been estimated at nearly $100 billion.  By setting parameters on what features of useful articles can be protected, the decision could result in strategic shifts among industry participants engaged in creating, using or protecting unique designs.  Stay tuned!

After less than a day of deliberation, a California jury has found the members of the legendary group Led Zeppelin (and their record label) did not copy the famous opening riff of Stairway to Heaven from an earlier song by the band Spirit.  Applying basic copyright principles, the jury found that while Jimmy Page and Robert Plant may have heard Spirit’s song Taurus before composing the opening of Stairway, the songs were not “substantially similar.”

The verdict contrasts with another recent high-profile copyright infringement case in which a California jury found that Pharrell Williams, Robin Thicke and Clifford Harris infringed Marvin Gaye’s classic Got to Give it Up when writing Blurred Lines.  The Blurred Lines jury rejected similar defense arguments that the songs were not “substantially similar.”  (A previous blog on the Blurred Lines verdict can be found here.)

The two cases illustrate the fact-sensitive and often unpredictable nature of the “substantial similarity” test.  What remains certain, however, is that successful artists will continue to be challenged on the provenance of their works, even long after those works first topped the charts.

Section 505 of the Copyright Act provides that “a court may… award a reasonable attorney’s fee to the prevailing party as part of the costs” in a copyright case.  Ever since this somewhat ambiguous fee-shifting provision was enacted as part of the Copyright Act of 1976, the federal courts have been striving to delineate under what circumstances a fee award, or “fee-shifting,” may be appropriate.  Unfortunately, a split among the federal courts of appeal as to the appropriate test to be applied has led to uncertainty among litigants and practitioners about whether an award of attorney’s fees is likely in a particular case.

On January 15, 2016, the United States Supreme Court agreed to consider the appropriate standard for awarding attorney’s fees to a prevailing party under Section 505.  The question arises in Kirtsaeng v. John Wiley & Sons, Inc., a case discussed on this blog back in 2013 involving the reselling of college textbooks manufactured and purchased abroad.  In its previous decision, the Supreme Court ruled in favor of Kirtsaeng, finding the “first sale” doctrine protects the right to resell copyrighted works legally produced abroad in the United States, even by an individual or entity without express permission to do so.  After prevailing in the earlier decision, Kirtsaeng moved for an award of attorney’s fees pursuant to Section 505.  The District Court denied Kirtsaeng’s motion, and the Second Circuit Court of Appeals affirmed.

As explained in Kirtsaeng’s Supreme Court petition, there is a split among the federal circuit courts of appeal concerning the appropriate standard for awarding attorney’s fees under Section 505.  For example, the Ninth and Eleventh Circuits consider whether the prevailing party’s successful claim or defense advanced the purposes of the Copyright Act.  The Fifth and Seventh Circuits employ a presumption in favor of attorneys’ fees for a prevailing party that the losing party must overcome.  Other courts of appeals employ several “nonexclusive factors” the Supreme Court identified in dicta in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994).  Finally, the Second Circuit, as it did in the Kirtsaeng case, places “substantial weight” on whether the losing party’s claim or defense was “objectively unreasonable.”

Although receiving significantly less attention than some of the more “substantive” copyright cases before the Court, the Court’s decision to revisit, and hopefully clarify, the test for fee-shifting under Section 505 could have far-reaching implications and should be monitored accordingly.