If you ever forget what day it is, all you need to do is check out the Instagram account of Lebron James, and he can tell whether it’s “Taco Tuesday!!” On August 15, 2019, James took things a step further and filed a trademark application with the United States Patent and Trademark Office for the mark TACO TUESDAY. Reaction to news of the filing was mixed, and a spokesperson for James even felt the need to defend the application with the statement that, “It has nothing to do with stopping others from using the term.” Websites like LATaco.com criticized James’ attempt “to restrict the free market of taco related branding, marketing, and ideation.” The New York Times questioned whether anyone should hold a trademark for a phrase in wide use at Mexican restaurants around the country, while the Los Angeles Times went so far as to criticize James’ taco recipes. But why did James even need to defend his filing of this trademark application? Why was the initial assumption that he was applying for a trademark for the purpose of monopolizing the phrase? The answer is a mix of a misunderstanding of what a trademark is, and a misunderstanding of the other benefits a trademark registration provides.

The first reaction of many people to news of a trademark application is that someone is trying to prevent others from using a word or phrase. Indeed, Patriots quarterback Tom Brady was recently in the news saying that he regretted filing a recent application for the trademark TOM TERRIFIC. Brady was quoted as saying that, “I was actually trying to do something because I didn’t like the nickname and I wanted to make sure no one used it because some people wanted to use it.” But trademarks serve much more of a purpose than granting a monopoly over the use of a term or phrase (and, in fact, they don’t grant a monopoly at all). At their core, trademarks symbolize the connection customers have with a business. Far from serving as some type of “magic talisman”, trademarks allow businesses to make connections with their customers and quickly identify a single source of the products. For that reason, trademarks are inextricably connected to the particular goods or services of a specific business. This is also why a trademark is not equivalent to a monopoly. TACO TUESDAY as used with a Mexican restaurant has a different connotation and consumer connection than TACO TUESDAY used for running shoes or TACO TUESDAY used for podcasting.

This source-identifying function is where the other benefits of a trademark originate. Trademarks can protect consumers from knock-offs or cheap imitations. When functioning properly they can help ensure that the goods and services customers buy are of a consistent quality. A strong trademark can allow a business owner to expand their business through the use of trademark licenses. Trademark registrations provide a presumption of ownership and validity that can protect business owners from weak or baseless lawsuits (a benefit also hinted at by Lebron James’ spokesperson). Some online retailing tools like the Amazon Brand Registry are not available to those without a trademark registration.

In this case, James’ TACO TUESDAY trademark application was filed covering a variety of goods and services such as advertising and marketing services, podcasting services, and a website featuring non-downloadable videos and social media posts. James may be interested in ensuring that his fans can always get their authentic Taco Tuesday memes. Or he may be looking to turn this fad into a social media side-business. Or he may be looking to protect himself from lawsuits from others who would claim exclusive rights in the phrase TACO TUESDAY. Believe it or not, there has been fairly extensive litigation in the past over the phrase TACO TUESDAY, and new applications are still being filed (including one filed just days before James’ own application.

There are many reasons for filing a trademark application, and trademarks confer a range of benefits on their owners. While it’s fun for media and social media to look for nefarious motives in a silly meme, wiping a term or phrase from the English language is difficult or impossible to do with a trademark – especially one with years of prior use. The far more likely scenario is that the lettuce Lebron James is thinking about is money from a future business and not the topping on your dinner taco.

UPDATE: On September 11, 2019, the USTPO issued a preliminary refusal on the TACO TUESDAY trademark application. This is a little surprising because the USPTO typically takes about three months to review an application and in this case acted on it in under one. The two main issues raised in the refusal are that the phrase is commonly used and is thus less likely to identify only one source (which doesn’t explain the numerous other applications and registrations already allowed for the phrase), and that James’ application may conflict with an earlier registration for TECHNO TACO TUESDAY. We will keep an eye on this ongoing taco battle!

Beginning August 3, 2019, all foreign-domiciled trademark applicants, registrants and parties to Trademark Trial and Appeal Board (TTAB) proceedings must be represented by an attorney who is licensed to practice in the United States, according to the final rule recently issued by the United States Patent and Trademark Office (USPTO).  This means that all new applications, renewal filings and TTAB disputes filed on behalf of any foreign entity or individual must be filed by a U.S.-licensed attorney.  For purposes of this final rule, “foreign-domiciled” means either an individual with a permanent legal residence outside of the United States or its territories, and/or an entity headquartered outside the United States or its territories.

The USPTO has made this rule change to address a growing number of filings from foreign pro se parties that are either inaccurate or even fraudulent and that do not comply with U.S. trademark law or the USPTO’s rules. The USPTO hopes that this final rule will increase USPTO customer compliance with U.S. trademark law and USPTO regulations, improve the accuracy of trademark submissions, and safeguard the integrity of the U.S. trademark register.

In the short term, this final rule might be seen by international entities and individuals outside of the U.S. as an inconvenience or an unnecessary added expense. Assuming the rule accomplishes the USPTO’s stated goals of tightening compliance with U.S. trademark law and USPTO rules, and reducing fraudulent documents and applications submitted to the USPTO, however, the final rule could reduce costs for applicants across the board by eliminating the need for applicants to challenge fraudulent registrations or respond to likelihood of confusion refusals based on fraudulent applications and registrations. By implementing this rule, the USPTO could make the trademark system more efficient, more reliable, and more consistent, which will have the ultimate effect of helping everyone who uses or relies on the USPTO.

Note that this requirement of a U.S.-licensed attorney does not apply to the filing of Madrid applications through the World Intellectual Property Organization. For Madrid applications submitted with all formalities and statutory requirements already satisfied and in condition for publication, the USPTO will waive the requirement until the Madrid system is updated to allow for the designation of a US-licensed attorney. In the event of an office action on a Madrid application, a U.S.-licensed attorney will still need to be retained, as usual.

In March, news broke that stationary bike maker Peloton Interactive had been slapped with a copyright infringement lawsuit seeking more than $150 million in damages (Downtown Music Publishing LLC, et al. v. Peloton Interactive, Inc., Case No. 1:19-cv-02426 (S.D.N.Y.). The lawsuit, filed by ten music publishers, claimed that “more than 1,000 musical works” were used in Peloton’s [cycling videos] without appropriate synchronization licenses. The publishers’ original complaint painted Peloton as a $4 billion tech giant raking in money on the backs of copyright holders all while willfully ignoring its obligations to those copyright holders.

On Tuesday, Peloton slapped back, filing Counterclaims against both the music publisher plaintiffs and the National Music Publisher’s Association (“NMPA”) for anti-trust violations of the Sherman Act and tortious interference. Contrary to the claims of the Complaint, Peloton argues in its Counterclaims that it did attempt to negotiate appropriate licensing, and that it has entered into licenses with publishers and the performing rights organizations for the use of the songs, but that its efforts were stymied by the anticompetitive behavior of the NMPA and the named music publishers.

The problem, Peloton claims, is that the publishers’ synchronization license structure (traditionally done on a song-by-song basis) is ill-suited to Peloton’s situation where a catalog-wide license would be more appropriate. In the copyright world, synchronization licenses allow a licensee to synchronize music with visual media of some kind. Peloton alleges that it invested tens of millions of dollars building systems and an infrastructure to enable licensing mechanisms appropriate for its business. It attempted to negotiate with NMPA for these sync licenses even while the NMPA would not identify the specific publishes on whose behalf it was negotiating, and even while the NMPA insisted on payment for song licenses from every publisher regardless of whether Peloton had any desire to actually use that publisher’s songs. When license negotiations ultimately broke down in early 2019, Peloton attempted to pursue licenses directly with the music publishers whose works Peloton desired to use on its service. However, these negotiations suddenly ceased “in a near-simultaneous and identical fashion”, which Peloton believes was the result of pressure from NMPA and its leadership.

The lawsuit, and Peloton’s counterclaims, highlight issues that have long existed in the copyright world, including the concentration of publishing rights in a relatively small number of entities, a great imbalance of negotiating power for businesses both small and large looking to license copyrighted works, and even a lack of transparency as to who owns rights to various musical works. While the Music Modernization Act of 2018 sought to address some of these issues, some of its key components (like a centralized ownership database) have yet to be established. Time will tell whether this lawsuit will bring further changes to the copyright industry or whether Peloton will be forced to bend its practices to match the current licensing structure.

 

 

Fuct, a L.A. based clothing brand will be infront of the U.S. Supreme later this month. In the past, the United States Patent and Trademark Office (“USPTO”) has prohibited registration of marks that constitute immoral or scandalous matter, as well as marks that are disparaging. In 2017, the Supreme Court famously overturned the USPTO’s ban on “disparaging” trademarks when it permitted registration of the mark “The Slants” for an Asian-American rock band (Matal v. Tam, 137 S. Ct. 1744 (2017)). Now the Supreme Court will turn its attention to the question of whether the scandalous-marks provision is similarly unconstitutional.

The USPTO argues in this case that the scandalous matter limitation is permissible because it is viewpoint-neutral unlike the prior disparagement provision – an issue that was expressly “left open” by Justices Alito and Kennedy in the disparagement decision. The application of the scandalous marks limitation often turns on the context of the trademark and the potential consumer’s perception. However, the USPTO insists that the limitation does not necessarily look at an applicant’s subjective intent or viewpoint, but rather prohibits only offensive methods of expressing an idea.

Erik Brunetti, owner of the Fuct brand, argues that the scandalous matter limitation should be treated just like the disparagement clause was treated, and should be ruled unconstitutional. Brunetti argues that the USPTO’s scandalous matter limitation has not been applied in a viewpoint neutral way to prevent registration of “profanity, excretory and sexual matter”, but has also blocked proposed third-party marks like “Coffee Nazi” for a book series, “Taliban Cookie Company” for online wholesale and retail store services, or “Acapulco Gold” for suntan lotion. Meanwhile, the USPTO has allowed registration of trademarks for “FCUK”, “WTF is up with my love life?!”, “Famous Feces”, “Poop”, “Irish by intercourse”, “Satan’s Piss”, and “Mile High 69”. Among other things, Brunetti argues that this purportedly selective application of the scandalous matter limitation proves that the USPTO’s ban is not content-neutral.

The case, Iancu v. Brunetti, No. 18-302, is set for oral argument on April 15.

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.