FTC Commissioner Terrell McSweeny is scheduled to resign effective April 28 and may leave with acting Chairman Maureen Ohlhausen as the sole commissioner. Law360  published an article by partner John Villafranco and professor Stephen Calkins that discusses whether the FTC can take formal action by a 1-0 vote and when does a commission cease being a commission? To read the full article, please click here.

Most companies understand they should obtain a license before using a photograph in an advertising campaign or on printed materials.  And yet companies may not think twice about embedding images from a tweet or social media post into the company’s own social media feed or website. But embedder beware.  A federal judge in the U.S. District Court for the Southern District of New York recently rejected and limited the application of the so-called “Server Test”.

In jurisdictions that have adopted the Server Test, a website publisher can only be liable for direct infringement when a copyrighted image is hosted on its own server as opposed to being embedded or linked from a third-party server. On February 15, 2018, the court in Goldman v. Breitbart News Network, LLC, et al., U.S. District Court for the Southern District of New York, No. 17-cv-3144, found that embedding a tweet of a copyrighted image can be considered copyright infringement, regardless of where the image is hosted.

The Copyright Act grants copyright owners several exclusive rights to control the distribution and use of copyrighted works, including the right to make copies of the work, the right to distribute those copies to the public, and the right to publicly display the copyrighted work. In the Goldman case, the Court held that embedding a tweet of a copyrighted image can violate the copyright owner’s exclusive display right.

See our advisory for more details.

As consumers get ready to watch the 2018 Winter Olympic Games, some companies are getting ready to capitalize on the public enthusiasm. Many marketers want to incorporate Olympics-related themes – ranging from overt mentions of the Olympics to more subtle sports references – in their ads in order to associate their brands with the attention that is being paid to the games.  Although this makes sense from a marketing perspective, it can also pose some legal risks.

The Ted Stevens Olympic & Amateur Sports Act gives the United States Olympic Committee (or “USOC”) exclusive rights to use certain words, like “Olympic,” and symbols, like the interlocking rings. The Act also prohibits use of any word, symbol, or combination thereof that “tending to cause confusion or mistake, to deceive, or to falsely suggest a connection with” the user of the marks and the Olympics. Other countries – including South Korea – have similar laws.

Some companies pay a lot of money for the right to use these marks, so if you use them without permission, you could get a letter (or worse) from an official sponsor or a group like the USOC. The USOC has even tried stop companies from using marks in hashtags. For example, in 2016, the USOC’s chief marketing officer wrote that companies could not use hashtags such as #Rio2016 or #TeamUSA.” According to some press reports, the USOC sent letters to various companies reiterating this position.

Feel free to cheer Team USA on from your personal social media accounts this summer. But remember that what may be called “patriotic” when done from your personal account could be called “infringement” when done from a business account.

 

The U.S. Copyright Office has imposed new requirements on service providers in order to maintain safe harbor protection under the Digital Millennium Copyright Act (“DMCA”).  Service providers who don’t meet these requirements will lose the safe harbor protections afforded by the DMCA.  The deadline to comply with these requirements is December 31, 2017.

DMCA and the Safe Harbor

The DMCA was enacted by U.S. Congress in October 1998 with the purpose of addressing certain intellectual property issues in the wake of the Internet.  Among the DMCA’s key provisions is “safe harbor” protection, designed to shield companies from liability for infringement due to content posted by a user on the company’s website, provided that the company qualifies as a “service provider.
Continue Reading Regulatory Changes Affecting All “Service Providers” – 12/31/17 Deadline

The overall design (such as the shape and cut) of a garment, bag or shoe is not protectable under current U.S. Copyright law because such items are considered “useful articles.” However, Section 101 of the Copyright Act provides protection for the “pictorial, graphic or sculptural features [of a useful article] that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the [useful] article.”[1]

In the fashion world, this provision of the Copyright Act allows companies to protect original pictorial, graphic or sculptural features that are applied to garments, bags and other accessories.  Examples include: fabric designs like a floral pattern; graphic art like an artistic rendition of a snake or tiger; and sculptural 3-D hardware adornments like belt buckles or buttons.  Copyright protection only covers the artwork itself, not the overall configuration of the garment or other product to which it is applied.[2]

For decades, courts and commentators have struggled to fashion a suitable test to determine when a pictorial, graphic or sculptural feature of a useful article (such as a garment) is protectable under § 101 of the U.S. Copyright Act.  On March 22, 2017, in a 6-2 decision written by Justice Thomas, the Supreme Court provided long-awaited clarificationMuch to the relief of the fashion industry, the Court adopted a test that preserves copyright protection for applied art to apparel and fashion accessories.

Continue Reading V-I-C-T-O-R-Y for the Fashion Industry: SCOTUS Establishes Uniform Test for Protection of Artistic Works Applied to Apparel

In 2014, Anheuser-Busch ran a contest on Facebook in which consumers were invited to submit photos of themselves “acting natural.” The contest rules stated that entrants could only submit their original works, and that the photos could not infringe anyone else’s copyrights, privacy rights, publicity rights, or other rights. Moreover, the rules stated that entrants granted Anheuser-Busch a broad license to use their photos in any media. After the contest ended, the company started using some of the photos on materials for its “Every Natty Has a Story” campaign, including coasters and posters that were distributed in bars.

So far, this story is fairly typical, and could represent any number of contests that are run in the US every year. What makes this story different, Kayla Kraft Photothough, is that the owner of one of the photos Anheuser-Busch used filed a lawsuit against the company for copyright infringement, invasion of privacy, and violation of her right of publicity. Kayla Kraft argues that she owns the copyrights to a photo of her drinking beer while wearing a fake mustache that Anheuser-Busch used in its campaign, and that the company used the photo without her consent. She is seeking unspecified damages.

It’s difficult to piece together what may have happened. According to press reports, Anheuser-Busch says that Kraft’s picture was submitted as a contest entry. The company hasn’t answered the complaint yet, though, and the complaint doesn’t specifically mention the contest, so we don’t have a lot of details. Obviously, the case is going to turn on facts that we don’t have, including who submitted the picture. But although it’s too early to draw clear lessons from the case, the suit still highlights some important issues related to the use of user-generated content (otherwise known as “UGC”).

Companies can – and should – put provisions in rules that (among other things) tell people what they can and can’t submit, specify what rights the company has to submissions, and release the company from any liability. Keep in mind, though, that not everyone will read the rules, and that submitters may not even have the authority to grant the necessary rights. There are some things companies can do to address these risk. For example, it might make sense to highlight key provisions outside of the rules. And although you may be able to rely on online releases for some things, there are instances – such as when you want to use content offline – in which an offline written release make more sense.

Almost every campaign that includes UGC involves a careful balancing of risks. Because a “perfect” solution may be cumbersome in many cases, most companies will accept some level of uncertainty. But lawsuits like this serve as good reminders of what can go wrong.

When a company comes up with a new product or feature, it will usually want to advertise the benefits of that product or feature. If the company believes that it is also the first or only company to have that product or feature, it may also want to tout its status as an innovator. For example, the company may advertise that it is the “first” company to introduce something, that it is the “only company” to offer it, or that it is “exclusive” to them. As with all objective claims, these claims require substantiation. In other words, the company must take steps to ensure that they are true. Sometimes, this can become a difficult exercise of trying to prove a negative, but there are good places to start.

SnappyScreen sells an automatic sunscreen application vending machine into which a person can walk in pale, and walk out nicely-bronzed ten seconds later. The SnappyScreencompany touted this benefit to prospective customers, and it advertised that its machine was “the World’s First Touchless Sunscreen Application System.” All is not sunny in the world of sunscreen machines, though, and SnappyScreen was sued by a competitor who argues that this claim is false. Sunscreen Mist Holdings argues that it has sold and promoted similar products since 2006, and that those products are protected by a patent. The company is suing for patent infringement and false advertising.

It’s too early to predict how this case will turn out, but it’s not too early to identify a key lesson here. If you want to advertise that you are the first or only company to have a product or feature, it’s often a good idea to commission a search by a patent attorney.  A good patent attorney will look for issued patents and other pre-existing products and public disclosures that can help you identify whether you are, in fact, the “first and only.” The results can help you figure out whether you can support the claim you want to make or, if not, whether there are ways to narrow it down.  For example, if you can’t claim that your company was the first to come up with a certain type of product, maybe you can focus on the uniqueness of a certain feature.

Aside from providing advertising guidance, the search can also be used for other purposes, such as determining whether there are patents your product might be infringing (and how to design around them), and whether it makes sense to explore patent protection for your product or any of its unique features.

The analysis may require additional steps, but if you skip this first one, you might find yourself getting burned later.

If your website allows users to post content, you’re probably already familiar with the Digital Millennium Copyright Act. Among Copyright Image on Keyboardother things, the DMCA provides online service providers a “safe harbor” from potential liability arising from publishing content that infringes a third party’s copyrights, if that content was posted by another person. In order to take advantage of that safe harbor, companies need to take certain steps, including designate an agent to receive notifications of claimed copyright infringement.

Last month, the Copyright Office issued a Final Rule that will impact all online service providers, even those who have already registered for safe harbor protection. Here is a summary of the key changes:

  • Effective December 1, 2016, the Copyright Office will no longer accept registrations on paper or PDF, as it has done since the DMCA was enacted in 1998. Instead, agents must register through an online system.
  • All online service providers must register through the new system by December 31, 2017 – even if they have registered before. Failure to do so will result in a loss of safe harbor protection as of January 1, 2018.
  • Registrations will expire after three years, so online service providers will need to renew their registrations in order to maintain protection. The Copyright Office will send automated alerts to remind account holders about upcoming renewal deadlines. Any amendment or update to a registration will restart the three-year clock.
  • There will be a flat fee of $6 for each registration, amendment, and renewal. Previously, online service providers had to pay a $105 registration. (Renewals were not required.)
  • Online Service Providers can now name a department or even an entire entity (such as a law firm or other service provider) as the designated agent.
  • Until December 31, 2017, copyright holders who want to submit a takedown notice will have to search both the old and the new electronic database when trying to identify registered designated agents.

To help acquaint users with the new system, the Copyright Office has created the various video tutorials to show, step-by-step, how to use the system.

For more information, please see our advisory.

The 2016 Summer Olympic Games are about one month away, and as athletes are getting ready to compete for medals, companies are getting ready to compete for consumers. Many marketers think that including Olympics-related themes – ranging from the overt (like the rings) to the more subtle (like references to “going for the gold”) – are the best path to victory. Although it’s understandable for a marketer to want to link their company to the excitement of the Olympics, that can be risky, if the company isn’t an official sponsor.

Remember that the International Olympic Committee and the United States Olympic Committee have exclusive rights to Olympic marks and that the unauthorized use of those marks could constitute infringement. The protected marks include Olympic rings, the Olympic flame, “Team USA, and “Rio 2014.” Some companies pay a lot of money for the right to use these marks, so if you use them without paying that money – even on social media – it’s likely to get noticed, and you could get challenged.

For example, when the Olympic torch blew out in Sochi, a bystander with a Zippo lighter re-lit the flame. Zippo capitalized on that Zippo1event and posted pictures on social media with the hashtag #ZippoSavesOlympics. The company was quickly contacted by Olympic officials and it stopped using the hashtag soon after. (Revised ads referred more generically to “winter games.”) It could have been worse. The USOC can bring a civil action against any company who uses an Olympic trademark in a way that tends to cause confusion or falsely suggests an association between the Olympics and that company.

Feel free to cheer Team USA on from your personal social media accounts this summer. But remember that what may be called “patriotic” when done from your personal account could be called “infringement” when done from a business account.

Last week, we posted that White House had objected when Samsung used President Obama’s image in a tweet. And before that, we posted that Michael Jordan had objected when Jewel-Osco used his name and a picture of his iconic shoes in ad. Now, the estate of Elvis Presley has filed a new lawsuit alleging that Beretta used the name and image of the legendary singer (and gun enthusiast) to promote its new Beretta 692 competition shotgun.

The Italian gun-maker featured Elvis imagery in various ads, including the one below, and hired Elvis Elvisimpersonators to appear at various events. (Catch a video here before it’s taken down.) According to the complaint, Beretta’s unauthorized use of the Elvis imagery “falsely indicated to the purchasing public that Beretta, its business, and its goods were somehow sponsored, endorsed, or approved by plaintiff . . . .” This caused injury to the estate “by depriving the plaintiff of its right to control the usage of its property and to derive monetary benefit from authorized usage of such property.” The estate seeks an injunction and monetary damages.

This case serves as a reminder that a celebrity’s right of publicity can extend beyond the grave. A number of states — including Tennessee — have statutes that explicitly recognize a post-mortem right of publicity. Even in states without these types of statues, the estates of celebrities may have certain common law rights. If you want to use a celebrity in your ad campaign — regardless of whether that celebrity is dead or live — make sure you check with your legal team first.