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Practical IP

The Intellectual Property Law Blog

Best Legal Practices for Brands on Social Media

Posted in Advertising, Copyrights, PRACTICAL-IP Tips, Privacy & Data Protection, Trademarks, Websites, Domain Names & Apps

Legally promote your brands and fans on social media with this overview of intellectual property, privacy, advertising and promotions issues and solutions…Best Legal Practices for Brands on Social Media

 

Facebook, You and the Government: The SEC is Following Your Tweets

Posted in In the News, Privacy & Data Protection, Websites, Domain Names & Apps

The United States Securities and Exchange Commission has finally joined the age of social media.  In a watershed report issued last month, the SEC concluded that publicly-traded companies, subject to the still-vague limitations discussed below, may use social media sites to disclose material financial information to the investment community.

The SEC’s report followed an investigation into Netflix, Inc. and Reed Hastings, its Chief Executive Officer, after Hastings posted information about the company’s growing subscriber numbers on his personal Facebook page.  Although the SEC ultimately did not pursue a case against Netflix or Hastings, its investigation resulted in the SEC’s issuance of a report intended to modernize Commission rules regarding how companies share important information with investors.

Historically, these disclosure rules have been defined by the SEC’s Regulation Fair Disclosure, or “Regulation FD,” which generally requires issuers to publish material, nonpublic information to investors simultaneously.  According to the SEC, Regulation FD is “intended to ensure that all investors have the ability to gain access to material information at the same time.”  Regulation FD is, and always has been, about the fair and equal distribution of information to the investing public.

In its April 2, 2013 press release announcing the new rule, which effectively supplements Regulation FD, the SEC stated for the first time that, “companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation FD…”  This new rule, however, while granting companies the newly-issued power to use social media to share their important information, comes with conditions on the use of that authority.  Specifically, the SEC concluded that social media outlets – like the content of a company’s website – can constitute precisely the selective, and unfair, disclosure of material information that Regulation FD was designed to prevent in the first place.

While at first glance the SEC deserves credit for authorizing companies to do what the rest of the world already does, two new problems have resulted.  First, the Commission has yet to provide any real guidance to those companies on how they can use social media to share information with their investors.  Until the SEC provides more guidance on how issuers can use social media to share information with investors, these companies are largely left on their own in navigating – at their own peril – the dos and don’ts of the new rule.

Second, in an age of increasingly sophisticated frauds and identity theft, companies run the risk of having their social media feeds hijacked or spoofed, and false information consequently disseminated to the marketplace.  A fake Twitter or Facebook report on a public company could easily cost investors millions, if not billions, of dollars in the blink of an eye.

Because of the still murky waters surrounding the SEC’s new rule, companies should take a number of steps before using social media to disclose important information to the public:

  • Treat social media information as any other information issued via a traditional press release.  Identify an individual, or individuals, in your organization who will be responsible for approving the content of any social media information issued by the company.  Keep in mind that the SEC’s report notes that “disclosure of material, nonpublic information on the personal social media site of an individual corporate officer, without advance notice…is unlikely to qualify as a method”      complying with this interpretation of Regulation FD.
  • Make sure that no information is transmitted through social media without written approval of a designated individual within your company.  This will not only guard against incorrect or factually unverifiable information reaching the public through social media, but it will also protect the company from prematurely releasing information or accidentally      transmitting confidential or nonpublic information – something that has become increasingly common as social media communication has risen exponentially in the last few years.
  • Establish protocols for alerting investors about the format of social media the  company will use to transmit information.
  • Task individuals in your company with identifying the most effective and reliable social media channels through which to transmit information.
  • Monitor what’s out there in the social media world that potentially could be viewed, by the SEC or the public, as social media content from or sanctioned by your company, knowing that false or incomplete information could have an immediate impact on your company’s share price or result in an unwanted regulatory inquiry.

Please contact one of our attorneys listed below with questions regarding this topic, or to arrange for a more detailed presentation. To read more on this topic, click here.
Contact Information:

Jeff Ansley

Jay Wallace

Greg Kelminson  

Unauthorized Unlocking of Cell Phones Now Illegal

Posted in Copyrights, In the News, Software, Websites, Domain Names & Apps

Pursuant to a ruling by the Librarian of Congress in his triennial review of potential exemptions to the Digital Millennium Copyright Act (DMCA), which prohibits circumventing technological measures that protect copyrighted works, it is now illegal to “unlock” a new mobile phone purchased from a carrier after January 26, 2013, without the approval of the carrier.

In other words, consumers who purchase a new mobile phone from a carrier on or after January 26, 2013, will either have to obtain the carrier’s permission to unlock the device or buy a new phone in order to change service providers.  Additionally, consumers traveling abroad won’t be able to use SIM cards from international carriers on a locked phone without the carrier’s permission.  “Legacy” phones “previously purchased or otherwise acquired by a consumer” prior to January 26, 2013 (whether used or unused) may legally be unlocked because they have been grandfathered in under the ruling.

Consumers who unlock a phone without the carrier’s consent could be fined $200 to $2,500 per act, and willful violators may now face criminal penalties of up to 5 years in prison and/or $500,000 in fines.

Unauthorized unlocking (even of legacy phones) may also violate the terms of the carriers’ contracts, and can result in contact termination fees, penalties, and/or discontinued service.

The unlocking exemption (which was granted in 2006 and 2010) could be reinstated in another three years during the Librarian of Congress’ next DMCA rulemaking proceeding, which will be initiated in late 2014.  There is also a We the People petition that calls for the White House to ask the Librarian to rescind the decision or support legislation that would make unlocking permanently legal.

It’s interesting to note that the same ruling exempts “jailbreaking” of cell phones (but not tablets or game consoles).  “Jailbreaking” occurs when a user removes restrictions on a device in order to download of apps or software not approved by the manufacturer or otherwise makes unauthorized modifications to the operating system. Jailbreaking voids the phone warranty, often violates the terms of phone license agreements, and can cause operating issues with the phone.  Once a consumer jailbreaks a phone, it can be unlocked; however, unlocking a phone through jailbreaking is now illegal and legitimate unlocking by a carrier is no longer an option.

The Importance of Searching and Protecting Brand Names

Posted in IP Ownership, Litigation, Trademarks

The Kardashian sisters’ recent launch of their KHROMA cosmetics and beauty care product line has caused a bit of a stir.

The sisters (through their licensing company, Boldface Licensing + Branding) applied with the U.S. Patent and Trademark Office (“USPTO”) in early June 2012  for registration of the marks KARDASHIAN KHROMA and KHROMA BEAUTY BY KOURTNEY, KIM AND KHLOE, both for personal care products including cosmetics, body and beauty care products based on an intent to use the mark in commerce.  The USPTO issued Office Actions in September 2012 refusing registration of the marks based on likelihood of confusion with an existing registration for the mark KROMA for use in connection with cosmetics owned by Florida-based makeup artist Lee Tillett, who claims to have been using the mark in commerce since March 2004 and whose trademark registration issued on January 3, 2012.

It appears that an attorney was involved with the filing of the Kardashians’ applications, so one would assume that the attorney perform a search to see whether there were any identical or similar marks already registered with the USPTO and/or already in use in the marketplace for the same or related goods or services.  Whether a search was performed or not, the sisters proceeded to file trademark applications and — even after receiving the registration refusal – actually launch their cosmetics line in late 2012, and their products are currently available in CVS, K-Mart, Sears and Ulta stores.

Now, the Kardashians are being sued for trademark infringement by Tillett (who is demanding $10 million in damages), and are also being sued by the owners of Chroma Makeup Studio in Beverly Hills claiming trademark infringement of their common law (aka, unregistered) trademark rights.

There do appear to be a number of mark co-existing on the USPTO Trademark Register that contain the term CHROMA for use with personal care products, so it’s not clear how the courts will come out on either of these lawsuits.  (NOTE: In the trademark world, the terms KHROMA, CHROMA, and KROMA are viewed as identical, because they are pronouced the same, look similar, and are mere misspellings of the same word, which apparently means “color” in Greek.)  It may be that the mark CHROMA, regardless of how it’s spelled, is somewhat dilute or frequently used for personal care products, so the addition of the terms KARDASHIAN or BEAUTY BY KOURTNEY, KIM AND KHLOE to the KHROMA marks is sufficient to distinguish the Kardashians’s KHROMA marks from other CHROMA or KROMA marks in the marketplace for similar products.

However, there are lessons to be learned from both sides of this battle.

For the Kardashians, to avoid getting sued in the future, in addition to performing trademark searches for potential marks before launching a product line, I would recommend that they attempt to come up with a truly unique name to prevent any likelihood of consumer confusion with similar marks that may already be used in the marketplace, registered in one or more Secretary of State offices, and/or registered with the USPTO for use in connection with the same or highly related goods or services.

For U.S. trademark registration owner Lee Tillett, I would recommend that she be vigilant in policing her mark and enforcing her trademark rights against identical or confusingly similar marks used in connection with identical or highly related goods and services.  This is especially true in this instance where the lesser-known Lee Tillett, who is the senior/initial user of the KROMA mark, could become the victim of “reverse confusion.”

Typically, trademark infringement occurs when a second party (or junior user) starts using a mark that is likely to confuse consumers as to some sort of affiliation with the better known senior user of the same or similar mark.  In this instance, the junior user (whether intentionally or not) benefits from the reputation and goodwill of the senior user.  However, “reverse confusion” occurs when a more powerful junior user (say, the Kardashians) uses the same or similar mark of a smaller, less powerful senior user (say, Lee Tillett).  “In a reverse confusion situation, rather than trying to profit from the senior user’s mark, the junior user saturates the market and ‘overwhelms the senior user.’”  3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 23:10 (2006).  In other words, because of the Kardashians’ fame and connections, they are likely to swamp the marketplace with their KHROMA cosmetics to such a widespread extent that consumers would actually mistakenly believe that Tillett’s KROMA cosmetics are somehow associated with the Kardashians.

Finally, with respect to Chroma Makeup Studio in Beverly Hills, I would have recommended that they file trademark applications with the USPTO in order to obtain nationwide rights in their mark instead of attempting to rely on common law trademark rights.  Additionally, if they were planning to create a makeup line using their CHROMA mark, I would have recommended that they file an intent-to-use application with the USPTO to reserve the mark and prevent third parties from registering identical or confusingly similar marks during the time Chroma Makeup Studio was developing its cosmetics line.

Click here for more information about the Kardashian KHROMA disputes.

How to Protect Titles of Creative Works as Trademarks

Posted in Copyrights, IP Ownership, Trademarks

I recently had an article entitled “A Different Kind of Title Insurance: How to Protect Titles of Creative Works” published in Bloomberg BNA’s Patent, Trademark and Copyright Journal.

Although books, movies, television shows, artwork, music, lyrics and sound recordings are protected by copyright, the titles, names and other short phrases associated with these creative works are often viewed as ideas or concepts and, therefore, do not contain the minimum amount of authorship to meet the requirements for copyright protection. However, in certain instances, trademark tools are avilable to provide a level of protection for titles.  The article details and explores these tools and discusses how they sometimes diverge from traditional intellectual property doctrine.

The full text is available by clicking here.

 

Patent Office to Open Dallas Regional Office

Posted in In the News, Patents

The U.S. Patent Office announced today that it will open four new regional offices, in addition to the main office outside of Washington D.C.  Dallas will be the site of one of the new regional offices, in addition to Detroit, Denver, and the Silicon Valley area.  The patent office expects to employ 125 people at each of the new regional offices.  Selection of the four sites was based upon a comprehensive analysis of criteria including geographical diversity, regional economic impact, ability to recruit and retain employees, and the ability to engage the intellectual property community.

The Detroit office will open on July 13th.  No timeline has been announced for the opening of the Dallas office.

Press Release.

Are Titles of Creative Works Protectable?

Posted in Trademarks

You cannot register a trademark for the title, or a portion of a title, of a single creative work (such as a book, a television episode, a film, a live theatre production, or a phonograph record).  [Interestingly, computer software and computer games are not treated as single creative works.]

However, if the title has been used in connection with a series of creative works (e.g., a series of books, the second edition of a book with significant changes, a periodically issued magazine, a television or movie series, a series of live performances [such as by a musical artist], educational seminars, or a continuing radio program), it may constitute a mark for either entertainment services or educational services.

If you currently have a single creative work, but you plan to create a series of creative works using the same title in the near future, you may file an intent-to-use trademark application for the title and obtain a registration once you have more than one work using the title. 

A portion of a title of a creative work is registrable only if (1) it creates a separate commercial impression apart from the complete title (as indicated by the size, type font, color, and any separation between the mark and the rest of the title); (2) it is used on series of works; and (3) it is promoted or recognized as a mark for the series.  For example, the mark THE LITTLE ENGINE used in connection with a series of books, such as “THE LITTLE ENGINE THAT WENT TO THE FAIR” and “THE LITTLE ENGINE GOES TO SCHOOL,” would be registrable if THE LITTLE ENGINE was displayed prominently on the books and the applicant or others promoted THE LITTLE ENGINE as a book series title.

However, you cannot register a trademark with a changeable or “phantom” element, such as _____ FOR DUMMIES, where the blank line represents a word, geographic location, alpha-numeric designation, date or year, or other component that is subject to change.  Such applications will be refused on the ground that the application seeks registration of more than one mark. (Note: The owners for the FOR DUMMIES series of books were able to obtain trademark registrations for the FOR DUMMIES portion of the title, but they were not able to obtain trademark registrations for _____ FOR DUMMIES.)

Article One Partners Pioneers New Type of Patent Search

Posted in In the News, IP Ownership, Patents

Tech Crunch is reporting that Article One Partners recently raised seven million dollars in venture funding for its new approach to patent searching.  Tapping into a community that is frustrated with what it considers to be overly broad patents and the limitations of traditional patent searching Article One Partners has become one of the world’s largest patent research communities.  Article One conducts its patents searches by distributing requests for prior art research to more than one million scientists and technologists using a global, human powered search engine. Article One passes requests from individuals or corporations to find prior art relevant to a particular patent to its community of patent experts who take those requests and return the most relevant prior art. Article One’s, the idea is to leverage its 18,000-plus scientists and technologists to deliver obscure and hard-to-find patent and IP research to its clients.

The community is incentivized by monetary rewards.  Researchers can earn between $5,000 and $50,000 for the return of applicable prior art. Article One also offers $100 prizes for the most valuable submissions on each project, and allows researchers to participate in its profit-sharing program by earning points based on their involvement and activity in projects on the site.

More information can be found at www.articleonepartners.com.

New Proposed Fees for Post Issuance Proceedings Announced by the Patent Office.

Posted in In the News, Patents

 The Patent Office has recently released its proposed fee schedule for the post issuance proceedings, which includes Ex Parte Reexamination, Inter Partes Review, and the new Post Grant Review process.  Each has increased substantially over the previous fees for Ex Parte Reexamination and Inter Partes Reexamination.

The filing fees for Inter Partes Review are proposed to be $27,200 to review up to 20 claims, $34,000 to review 21 to 30 claims, $40,800 to review 31 to 40 claims, $54,400 to review 41 to 50 claims, $68,000 to review 51 to 60 claims, and an additional $27,200 for each additional group of 10 claims. The new fees represent a substantial increase over the existing fee for Inter Partes Reexamination of $2520.

Fees for Ex Parte Reexamination are proposed to be raised from the current fee of $2520 to $17,760.

The fees for the new Post Grant Review Process are proposed to be $35,800 for up to 20 claims, $44,750 to review 21 to 30 claims, $53,700 to review 31 to 40 claims, $71,600 to review 41 to 50 claims, $89,500 to review 51 to 60 claims, and an additional $35,800 for each additional group of 10 claims.

It will be interesting to see if the new fees have an effect on the filing rates for post issuance review.