Monday, December 22, 2014

Merry Christmas Johnny Marks

Christmas music has been dominating local radio play since Thanksgiving. For five weeks every year, many old – and some newer – seasonal standards are played over, and over, and over on local radio stations, cable and Internet music services and at local music shops. And we have Johnny Marks to thank for much of this.

Johnny Marks may be Mr. Santa Claus to the recording industry. He is responsible for composing some of the most well-known and beloved holiday music, including: Rudolph, the Red-Nosed Reindeer; Run, Rudolph Run; Rockin’Around the Christmas Tree; A Holly Jolly Christmas; Silver and Gold; Happy New Year Darling, and many, many more. Marks is a member of the Songwriters Hall of Fame, and a complete listing of his song catalog appears on the SHF website.

Marks passed away in 1985, but his estate continues to profit from the five week bonanza of air play for his songs. And by far, his single most famous and most profitable song is Rudolph the Red-Nosed Reindeer. Numerous singers have recorded versions of Rudolph, including Gene Autry, Bing Crosby, Dean Martin, Ray Conniff, Alvin and the Chipmunks, Paul Anka, Burl Ives, The Temptations, The Jackson Five, Ray Charles, Dolly Parton, Ringo Starr, Lynyrd Skynyrd, Destiny's Child, Barry Manilow, DMX and more. A1980 article in People Magazine states that Marks earned over $800,000 in annual music royalties at that time, with 75% attributed to Rudolph.

Merry Christmas, Mr. Santa to the record business -- Johnny Marks.

Thursday, December 18, 2014

Lies, Damn Lies and Trademark Lies

Some people lie. Shocking.

Some trademark applicants lie on their official government forms. Doubly shocking.

Trademark owners are required to establish use of their trademark on the goods or services indicated in their trademark filings. Proof of use of the trademark requires both a declaration confirming use in commerce plus an appropriate specimen for at least one of the designated goods or services in each class. These filings are signed pursuant to an official declaration or oath.

But during a two year period, from July 2012 to mid-October 2014, the federal trademark office conducted a pilot study to determine compliance with the use requirement. What the PTO learned is not pretty -- in about one-half of the registrations the trademark owners were not able to verify claimed use.

The PTO selected 500 registrations for this study. In about 16% of the selected registrations, the trademark owner failed to prove use of the mark on the indicated goods or services. The PTO cancelled these registrations. And in about 35% of the selected registrations, the trademark owner was not able to prove use on at least some of the listed goods or services, causing the PTO to delete the unsupported goods or services from the registrations.

The PTO reached this sorry conclusion: "of the 500 registrations selected for the pilot, to date a total of 253 registrations, or 51%, were unable to verify the previously claimed use in their Section 8 or 71 Declarations." The statistics for the falsely claimed trademark use are provided by the PTO:
Deletions/Cancellations/Acceptances to Date by Basis for Registration

Basis for Registration
Percentage of Registrations Selected for the Pilot Deleting Goods/Services Queried Under the Pilot
Percentage of Registrations Selected for the Pilot Receiving Notices of Cancellation
Percentage of Registrations Selected for the Pilot Receiving Notices of Acceptance (Including for a Narrowed Scope of Goods/Services)
Section 1(a)
Section 44(e)
Section 66(a)
Combined Section
1(a) and 44(e)

The concern here goes beyond the false statements contained in government filings. That is, of course, bad in and of itself for both legal and moral reasons. But the concern here, too, relates to the misuse of government filings to obtain a trademark monopoly grant, thereby depriving a genuine user of the right to register the same or similar trademark on similar goods or services.

We may all be aware of genuine trademark users who were unable to register their marks because someone obtained an active registration when, in fact, the registrant was NOT using the mark on its indicated goods or services.

The federal trademark office has established an e-mail address for public comments and suggestions for potential solutions to this problem: 

Trademark Office Reduces Filing Fees

If you can wait three weeks to file that new trademark application, you can save some money. Effective Saturday, January 17, 2015, the U.S. trademark office is reducing some of its fees.

The fee for a new electronic trademark application filed on and after January 17, 2015 is reduced $50, provided that the applicant agrees to e-mail communication and agrees to file documents electronically during the prosecution period.

So, a TEAS fee will reduce from $325 to $275 per class, and a TEAS Plus fee will reduce from $275 to $225 per class. There is no reduction in the fee for a new paper application. This remains at $375 per class.

The registration renewal fee will also reduce by $100 for electronic renewals through TEAS, from $400 per class to $300 per class.

More information about the reduced fees is available in the Federal Register notice.

Monday, December 1, 2014

The Copyright Act's Limit on Post-Mortem Author Rights

A window or widower of a copyright author has certain rights available under the Copyright Act, but these rights may be cutoff depending on which State the copyright author was domiciled in at the time of death. The present Copyright Act, in Section 101, defines an author's widow or widower as the "surviving spouse under the law of the author's domicile at the time of his or her death."

One problem here relates to same-sex married couples. An author's widow or widower does not include a same-sex married spouse if the State in which the author is domiciled at death fails to recognize same-sex marriage.

Of import, the Copyright Act, in Sections 203 and 304, grants the author's widow or widower the termination interest of a deceased author. Since the Copyright Act preempts conflicting common law and State law, Section 301(a), this restricted definition of widow or widower is a big deal.

Legislation was recently introduced in Congress to resolve this issue. Pending bills in the House and Senate would include same-sex spouses in the definition of widow and widower. The pending revision to the Copyright Act would provide that:
An individual is the widow or widower of an author if the courts of the State in which the individual and the author were married (or, if the individual and the author were not married in any State but were validly married in another jurisdiction, the courts of any State) would find that the individual and the author were validly married at the time of the author’s death, whether or not the spouse has later remarried.
It does not appear likely that the pending bills will become enacted in the current lame duck Congress, and it is presently unclear how the makeup of the new Congress in January will impact this issue.

Wednesday, November 26, 2014

Filing of a Copyright Case Requires Registration and Not a Mere Application

Following the passage of the country's first copyright statute in 1790, and continuing with numerous revisions to the present day, one would assume that the precondition for filing a copyright infringement lawsuit would be settled. It is not. Whether or not a lawsuit can be filed if the copyright Register has not first granted or refused registration remains in considerable dispute.

Last week, a federal court in Michigan (E.D. Mich., Case No. 14cv12933) determined that a plaintiff that had not yet obtained registration, but was awaiting a registration decision from the Register, was not able to bring a copyright infringement claim because there was not yet a registration. In determining that it is not enough to merely apply for a copyright registration, the Michigan court joins the Tenth and Eleventh Circuit in holding that "registration" means registration and not mere application. By contrast, the Fifth, Seventh and Ninth Circuits have determined that mere application, without any final decision on registration by the Register, is adequate to permit the filing of an infringement lawsuit.

As mentioned, one would think that this very basic precondition to filing a lawsuit would have become settled by now. Indeed, the 1909 Copyright act, in Sec. 12, required registration as a precondition to filing a lawsuit (" No action or proceeding shall be maintained for infringement of copyright in any work until the provisions of this Act with respect to the deposit of copies and registration of such work shall have been complied with."). And the 1909 Act, in Sec. 6 added in 1939, provided that the Register "is charged with the registration of claims." In other words, the Register had to do something in order to effect registration under the 1909 law. It was not enough that an application was filed in order to complete an act of registration. The Register was charged with registration, not the applicant.

In its 2010 decision in Reed Elsevier v. Muchnick, the Supreme Court confirmed that standard practice under the 1909 copyright law required the Register to grant registration as a precondition to filing an infringement lawsuit. And if the Register refused, then the applicant would need to seek mandamus. Indeed, the Reed Elsevier court cited with approval the 1958 decision of Learned Hand in Vacheron & Constantin-Le Coultre Watches, Inc. v. Benrus Watch Co., emphasizing that "we can think of no other added condition for 'registration' but acceptance by the Register."

Section 411 of the present 1976 Copyright Act is the focus of the discord between the "application means registration" courts and the "registration means registration" courts. This section emphasizes that the Register must do something in order to effect registration. Section 411(a) requires as a precondition for filing a lawsuit that "preregistration or registration of the copyright claim has been made." Only if registration has been refused by the Register can the applicant file a lawsuit.
* * * no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights. 
17 U.S.C. Sec. 411(a).

Section 410(a) allows the Register to refuse registration if the applicant's deposit material does not constitute copyrightable subject matter or the copyright claim is otherwise determined by the Register to be invalid. As such, mere delivery of the application to the Register does not constitute registration. The Register must affirmatively allow registration. 

While the "registration means registration" approach may be inefficient, particularly when one considers that the denied applicant can sue anyway following rejection of registration, the obligation of a court to apply the statute as written remains important. Indeed, a court's adherence to the restrictions contained in Congressional enactments respects the role of Congress in ascribing the benefit and the burden imposed by statutes. 

As observed by the Michigan court last week, the language of the statute should be the starting point in determining its meaning, and should also be the ending point when the meaning is clear. It is tragic that after 224 years into this country's copyright regimen there exists a core dispute as to what condition must exist permitting the filing of a copyright lawsuit.

Monday, November 10, 2014

The Patenting of a Design Trademark

It appears that the U.S. Patent Office used to issue design patents for graphical trademarks. Portland patent attorney James Walters reports his astonishing find of a U.S. design patent, D3444, issued in 1869 for this trademark:

 The "inventor" set out the following "claim":
What I claim as my invention, and design to secure by Letters Patent, is--
The design for a trade-mark, herein set forth and shown.
Exactly how the Patent Office came to issue Letters Patent in a trademark is more than interesting. The Patent Act of 1836 was designed to improve patent quality by removing the then-authority for the issuance of patents from the U.S. Secretary of State to a new official, a Commissioner of Patents. The 1836 Act established a formal criteria for issuing patents, allowing a patent to an inventor who "discovered or invented any new and useful art, machine, manufacture, or composition of matter, or any new and useful improvement on any art, machine, manufacture, or composition of matter, not known or used by others before his or their discovery or invention thereof, and not, at the time of his application for a patent, in public use or on sale ..."

It is unclear why the Patent Office viewed the design of a trademark as a new or useful discovery, invention or improvement of useful art, machine, manufacture or composition of matter. A trademark is a source identifier, not an invention, and is not authorized under the patent clause of the U.S. Constitution, Art I, Section 8, cl.8. In any event, since the 1836 Act limited a patent's term to 14 years, this "inventor" may have outwitted himself by obtaining limited patent protection when a trademark, in theory, can last as long as it is used to perform its source identifier function -- perhaps forever.

It would be interesting to learn whether the Patent Office's issuance of Letters Patent was a common practice for design marks at any point in time, or whether this one presently known example is an aberration. If any reader has additional examples, kindly share.

Thursday, November 6, 2014

Negotiation in the U.S. for the Sale of a Patent-Infringing Product Is Not Necessarily Infringement Under U.S. Law

Section 271(a) of the U.S. patent law permits an infringement claim against anyone who "without authority makes, uses, offers to sell, or sells any patented invention, within the United States..." A question exists as to whether a U.S. company is subject to a patent infringement claim when it negotiates in the U.S. for the sale of a patent infringing product, including the setting of price and sales terms. That is, is mere negotiation sufficient to constitute a "sale" or an "offer to sell"?

The Federal Circuit answered this question in the negative in the last week's Halo Electronics case. The mere negotiation in the U.S. by a U.S. seller for the sale of a product that infringes a U.S. patent, including negotiation in the U.S. over price and projected demand, is insufficient to constitute a sale or offer to sell in the U.S. This was so when the actual sales transaction, including the final formation of the contract, as well as all delivery and performance under the contract, occurred outside of the U.S.

The Federal Court noted that the final formation of the contract occurred outside of the U.S., and the performance under the contract including final product delivery occurred outside of the U.S. The Court determined that there is a strong presumption "against extraterritorial application of United States laws." As such, the Court ruled that "pricing and contracting negotiations alone are insufficient to constitute a 'sale' within the United States."

The Court further ruled that there is no "offer to sell" in the U.S. if the actual sale transaction occurs outside of the U.S. "In order for a offer to sell to constitute infringement, the offer must be to sell a patented invention within the United States."

 So, the negotiation within the U.S. for the sale of a patent-infringing product is neither a sale nor an offer to sell when the final contract formation, as well as performance and delivery, occur outside of the United States.

As the Federal Circuit noted, "if one desires to prevent the selling of its patented invention in foreign countries, its proper remedy lies in obtaining and enforcing foreign patents." In other words, a U.S. patent is not necessarily worth the paper its printed on outside of the U.S.

Wednesday, November 5, 2014

Lawyer Receives Accolades From Judge -- And Is Then Sanctioned

Stop me if you've heard this one.

A lawyer presented oral argument to a panel of the Federal Circuit concerning a patent issue. Apparently, the lawyer did very well. A judge on the Federal Circuit, who was not on the panel and who is presently retired from the court, happened to attend a judges-only luncheon held following oral argument. At the luncheon, the panel judges informed the now-retired judge that the lawyer performed exceptionally well. The retired judge was proud to hear this good news, as he was a friend of the lawyer. The retired judge sent a laudatory e-mail to the lawyer. The e-mail stated:

Note that the retired judge was not on the panel that heard oral argument. And note further that the retired judge specifically invited the lawyer to "let others see this message."

So, what happened? The lawyer sent copies of the retired judge's e-mail to clients and prospective clients. And what happened next? Once the Federal Circuit learned that this e--mail of accolades was circulated by the lawyer, the court en banc issued an order publicly sanctioning the lawyer for distributing the e-mail. A copy of the court's order is here. The court determined that the lawyer's distribution of the e-mail constituted unprofessional conduct in that it inferred the lawyer's ability to improperly influence the court.

Note, finally, that the retired judge was not a part of the en banc court, but apparently the three judges, who gave the high accolades to the retired judge, were.