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 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.

For a number of years, patent owners have had broad discretion to bring patent infringement lawsuits in court locations, or “venues,” based on perceived strategic advantages and their own convenience.  A federal district court in eastern Texas, for example, has – for several reasons – been one of the favorite venues for patent owners.  Another favored jurisdiction, perceived as “plaintiff-friendly,” is the District of Delaware.

Courts have upheld patent plaintiffs’ choices of venue even when the alleged infringer’s only connection to the chosen locale was that the defendant sold some allegedly infringing products there.  The inconvenience of litigating in a jurisdiction far from the defendants’ home, along with other perceived plaintiff-friendly aspects of certain courts, has often provided significant leverage to patent plaintiffs.

No longer.  In TC Heartland LLC v. Kraft Foods Group Brands, LLC, No. 16-341, the United States Supreme Court limited patent plaintiffs to filing suit where the defendant is incorporated or where the defendant both has a “regular and established place of business” and also infringed the patent at issue.

In TC Heartland, Kraft alleged that TC Heartland – a manufacturer of flavored drink mixes – infringed one of Kraft’s patents.  Kraft sued TC Heartland for patent infringement in federal court in Delaware.  TC Heartland was an Indiana company headquartered in Indiana.  Its only connection to Delaware was that it sold product there.

Under the patent venue statute, a patent infringement case may be brought in a district where the defendant “resides” or where the defendant has infringed the patent and has a “regular and established place of business.”  Kraft did not contend that TC Heartland had a regular and established place of business in the District of Delaware.  Instead, Kraft argued that “resides” means anywhere the defendant is subject to personal jurisdiction.  Kraft relied on the federal statute that provides the general rule for venue choices in non-patent cases.  In an 8-0 decision delivered by Justice Thomas, the Supreme Court rejected the argument that the general venue statute should be used to interpret the patent venue statute and held that the word “resides” in the patent venue statute, as applied to U.S. corporations, means only the state where they are incorporated.

After TC Heartland, patent holders will be limited to filing suit: (1) in the state of the alleged infringer’s incorporation; or (2) the state where the infringer committed an infringing act and has a regular, established place of business.  The decision removes one of the tools in a patent plaintiff’s shed to bring additional pressure against alleged infringers, and plaintiffs will have to refrain from filing lawsuit in state’s that have a tangential relationship to the defendant’s home jurisdictions.

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!

Aereo, Inc. thought it had found a legal and clever way to deliver broadcast television programming to its subscribers inexpensively via the Internet.  Aereo “rented” equipment to its subscribers that captured and streamed broadcast programming at about the same time the programs broadcast over the air.

Aereo had designed its business model to take advantage of certain court decisions on copyright law involving Cloud-based services that permitted users to store and time-shift programming.  In a 6-3 opinion, however, American Broadcasting Cos. v. Aereo, Inc., the Supreme Court ruled that Aereo, Inc. infringed television broadcasters’ copyrights.

Under the Copyright Act of 1976, a copyright owner has the exclusive right to “perform the copyrighted work publicly.”  A person who publicly performs a copyrighted work may be found to have infringed upon the copyright.  As a result, the Court focused on the question of whether Aereo “performed” the copyrighted television programming “publicly” by streaming, or retransmitting it, to its subscribers at about the same time it was broadcast.

Aereo argued it only supplied equipment to its subscribers and did not “perform” the copyrighted television programs.  Aereo further asserted that its service was not “public” because the streams were transmitted to individual subscribers privately.  While noting that Aereo uses unique technical equipment for its services, the Court found that Aereo bears an “overwhelming likeness” to the cable companies specifically targeted by amendments to the Copyright Act in 1976.  The Court ultimately held that Aereo’s service is equivalent to a performance under the statute and that Aereo is not simply an equipment supplier.  The Court also held that Aereo performs publicly because “the subscribers to whom Aereo transmits television programs constitute ‘the public.’”

Yesterday’s decision exemplifies the courts’ ongoing struggle to adapt existing principles of intellectual property law to evolving technologies.  The decision has immediately raised concerns about the propriety of other Cloud-based services that permit consumers to store content of their choosing and watch at a later time – the updated version of the legally-approved practice of allowing an individual to record broadcast at home and watch it later.  Certainly, evolving technology will continue to present difficult line-drawing questions for the courts.