Barbie May Be Cool, But BRBY isn’t KÜHL

The web is rife with information and advice on how to register a trademark and, more importantly, how to protect one once you’ve got it. Much of the latter boils down to policing your mark by sending cease and desist letters whenever you suspect someone is infringing it. Good advice and, in many cases, all you need to ward off an infringer or potential infringer. But cease and desist letters aren’t always enough. Two recent cases highlight different routes that businesses traveled to protect their marks, one wrapping up quickly while the other dragged on for six years of litigation, with opposite results.

The rapid resolution came in a proceeding Mattel, Inc. brought this summer against Burberry Ltd. For anyone who has been living under a rock, Mattel makes Barbie — the dolls, the movie, the inescapable cultural “phenomenon.” The toy company brought an action before the United States Patent and Trademark Office to prevent fashion house Burberry — perhaps best known for its famous plaid-lined trenchcoats — from registering the mark “BRBY.”

Mattel claimed BRBY was likely to cause confusion because it is “visually similar” to Barbie and, “when spoken aloud, the marks are phonetically identical.” What’s more, according to Mattel, the likelihood of confusion was increased because many products sold by Mattel bearing the Barbie trademark overlap with the types of goods that Burberry was proposing to make with the BRBY mark, such as clothing, jewelry, and cosmetics. As the action stated, “[c]onsumers would be likely to wonder if, or assume that, [Burburry’s goods] are licensed by or affiliated with [Mattel].”

It’s impossible to tell exactly what went down in the proceeding because the parties reached an undisclosed settlement. However, Burberry subsequently withdrew its application to register the BRBY mark so I think we can take it as game over — in just under four months. If you ask me, it seems unlikely that anyone was going to get confused between Barbie and BRBY even though the vowelless mark could be pronounced in the same way. But clearly, Burberry figured the value of the BRBY mark wasn’t enough to justify protracted litigation.

At the other end of the spectrum, we have a federal litigation between Alfwear, Inc. and Mast-Jaegermeister US, Inc. (“MJUS”), initially filed in August 2017 and, after six years in the courts, concluded this September with the 10th Circuit Court of appeals affirming the lower court’s grant of MJUS’ motion for summary judgment.

Alfwear is a Salt Lake City company that makes outdoor apparel and gear under the brand name “KÜHL” (yes, it’s German for “cool”) and has registered trademarks for this brand name. MJUS is the US-based distribution arm of the German company that makes a herbal liqueur under the brand name — you guessed it — Jägermeister, which had a fairly repulsive shot of popularity in the mid-aughts as the drink of choice for frat parties.

As stated in the 10th Circuit’s decision, in 2016 MJUS “launched an advertising campaign to distance itself from its association with ‘pukey frat guys’ and spring break parties and remake the Jägermeister image as a ‘more premium’ brand and emphasize its German heritage.” Mast-Jaegermeister’s campaign did this by incorporating German words such as “kühl” “perfekt,” “and “dekadent ” into phrases such as “Drink it ice kühl” and “Be kühl — throw it back.” These phrases, which were intended to be easily understood by English speakers, were consistently accompanied by the Jägermeister mark.

In August 2017, Alfwear filed suit against MJUS, asserting that MJUS’s unauthorized use of the term “kühl” in connection with the advertising of MJUS’s goods or services infringed Alfwear’s registered trademarks and constituted federal and common law unfair competition. The district court held that MJUS’s use of “kühl” did not infringe on Alfwear’s “KÜHL” trademark, which it uses on its line of outdoor products, “because no reasonable juror could find a likelihood of confusion between the parties’ marks.” Yet Alfwear, refusing to back off, appealed and the case trundled on.

The 10th Circuit affirmed the district court, agreeing that MJUS’s use of “kühl” was unlikely to cause any consumer confusion and noting that MJUS had never put the word “kühl” on a Jagermeister bottle or any promotional clothing, and that Alfwear and MJUS’s products generally occupied distinct markets. (It is, however, worth mentioning that Alfwear has a pending trademark application for “KÜHL” in connection with wine, which presumably suggests that Alfwear is contemplating entering a market closer to that in which MJUS sells its products.)

So why did Mattel triumph in a matter of months while Alfwear fought MJUS for six years and, ultimately, lost? Was Mattel’s case really that much stronger than the one brought by the maker of KÜHL? Well, one key distinction is that there is overlap between Mattel’s Barbie-branded products and what Burberry sells, whereas there is no current overlap between KÜHL and Jägermeister. Knowing this, should Alfwear have realized it had a weaker case than Mattel and backed off earlier or not filed suit at all?

I think not. It isn’t always easy to accurately predict whether you’ll win or lose a trademark dispute because there are so many variables. Is your adversary going to be reasonable (like Burberry) or stand firm (MJUS)? How much time and effort have you and your adversary invested? Do you know all of your adversary’s motivations?
With that said, despite the risks, protecting a mark through litigation is a critical part of maintaining a mark and its value. Each time you don’t defend your mark, it potentially weakens your rights to it in the future. This is cumulative and can make it possible for others to obtain similar marks for their products. Moreover, even a loss might have a silver lining. It can aid in future decision-making when considering expansion into new markets.

Can NO FAKES be for Real?

This week, I’m taking a break from talking about court cases and instead focusing on a draft bill aimed at creating a federal right of publicity that was introduced in October by a bipartisan group of Senators. A quick refresher: the right of publicity allows an individual to control the use of their voice, and laws or cases governing this right exist in about two-thirds of the states.  

Now, with generative AI and “deepfake” technology, celebrities and entertainment companies are pushing for greater protection against the creation of unauthorized digital replicas of a person’s image, voice, or visual likeness. And the Senate, it appears, is responding, raising concerns among digital rights groups and others about First Amendment rights and limits on creative freedom. 

Before diving into the specifics of the bill and its potential implications, I want to step back and talk about the underlying reasons for intellectual property laws. These laws are the subject of entire law school classes (I took several of them), but I can quickly summarize two fundamental reasons why they exist. The first is to encourage artistic works and inventions, an idea that can be found in the U.S. Constitution. The idea is that allowing creators (in the case of copyright law) and inventors (in the case of patent law) to exclusively reap the economic benefits of their work will incentivize people to make art and invent useful things. Notably, both copyrights and patents are in effect for a limited amount of time: for patents, 20 years from the date of the application, while copyrights run for the life of the creator plus 70 years (note that length; it’s going to come up again). 

The second reason is to prevent consumer confusion. This is the central concern of trademark and unfair competition laws, which are intended to ensure that no one other than the company associated with a particular good or service is selling that good or service. 

The idea behind the right of publicity (you can read more about it in the context of generative AI here), includes a dash of both of these rationales. It ensures that individuals can profit from their investment in their persona by preventing others from using their name, likeness, voice, etc., without their permission. It also prevents brands from claiming someone endorsed a product without that person’s consent. 

With generative AI and the ease with which anyone can now create a digital replica of a celebrity to endorse a product or perform a song, artists and entertainment companies are worried that the current patchwork of state laws isn’t enough. Hence, the Nurture Originals, Foster Art, and Keep Entertainment Safe Act of 2023 or the NO FAKES Act of 2023, which, if enacted, would create a federal right of publicity. (A side question: in hiring staff, do Members of Congress test job applicants’ ability to come up with wacky bill titles that can be made into acronyms? Because this one certainly took some legitimate skill.) 

The bill protects against the creation of an unauthorized “digital replica,” which the NO FAKES Act describes as:  “a newly created, computer-generated, electronic representation of the image, voice, or visual likeness of an individual that is [nearly indistinguishable] from the actual image, voice, or visual likeness of an individual; and is fixed in a sound recording or an audiovisual work in which that individual did not actually perform or appear.”

In other words, NO FAKES bars using a computer to create an audiovisual work or a recording that looks or sounds very much like a real person when that person has not consented. This proposed right bars the creation of a digital replica during a person’s lifetime and for 70 years after death (the same as existing copyright laws). In the case of a dead person, the person or entity that owns the rights to the deceased’s publicity rights (often, the deceased’s heirs) would have to consent to the creation of a digital replica. 

If NO FAKES is passed, anyone who creates an unauthorized digital replica can be sued by the person who controls the rights; the rights holder can also sue anyone, like a website or streaming platform, who knowingly publishes, distributes, or transmits a digital replica without consent. This is true even if the work includes a disclaimer stating the work is unauthorized. 

That said, the Act as currently drafted does include some exceptions intended to protect the First Amendment. For example, NO FAKES states that it is not a violation of the Act to create a digital replica that is used as part of a news broadcast or documentary or for purposes of “comment criticism, scholarship, satire, or parody.”

Some other things to note: 

  • The right to control the creation of a digital replica does not extend to images that are unaccompanied by audio.
  • The draft bill states that the right to control digital replicas “shall be considered to be a law pertaining to intellectual property for the purposes of section 230(e)(2) of the Communications Act of 1934. This means that Internet service providers cannot rely on Section 230 to avoid liability.

Now, it is likely the draft will have undergone significant amendments and revisions if and when it is passed. As mentioned above, digital rights groups and others worry that the right of publicity can be used to litigate against speech protected by the First Amendment, as public figures in the past have tried when they don’t like something that has been said about them in the media. 

To me, the Act seems a bit suspicious. You may notice I’ve stressed how the Act extends protection against digital replicas to 70 years post-mortem, the same exact length as copyright protection. Isn’t this expansiveness a bit much considering the current state of play is no federal right of publicity at all? The extreme length of the proposed protection, coupled with the Act eliminating the use of disclaimers as a shield for liability, suggests NO FAKES is less about protecting the public and more designed to prolong celebrities’ and entertainment companies’ abilities to profit. After all, the right to publicity created in the NO FAKES Act can be sold by an actor or their heirs to a company like, say, a movie studio… that could then, in theory, continue to feature digital replicas of the aged or deceased actor in their films unchallenged for seven decades after death. Thelma and Louise 4: Back From the Abyss is coming, and Brad Pitt won’t look a day over 30. 

Good, perhaps, for Brad Pitt.  The rest of us, maybe not.  

Does Machine Learning Violate Human Copyright?

On October 30, 2023, a judge in the Northern District of California ruled in one of the first lawsuits between artists and generative AI art platforms for copyright infringement. While the judge quickly dismissed some of the Plaintiffs’ claims, the case is still very much alive as he is allowing them to address some of the problems in their case and file amended complaints. 

So what’s it all about? Three artists are suing Stability AI Ltd. and Stability AI, Inc. (collectively, “Stability”), whose platform, Stable Diffusion, generates photorealistic images from text input. To teach Stable Diffusion how to generate images, Stability’s programmers scrape (i.e., take or steal, depending on how charitable you’re feeling) the Internet for billions of existing copyrighted images — among them, allegedly, images created by the Plaintiffs. End users (i.e., people like you and me) can then use Stability’s platform to create images in the style of the artists whose work the AI has been trained.

In addition to Stability, the proposed class action suit on behalf of other artists also names as defendants Midjourney, another art generation AI that incorporates Stable Diffusion, and DeviantArt, Inc., an online community for digital artists, which Stability scraped to train Stable Diffusion, and which also offers a platform called DreamUp that is built on Stable Diffusion. 

The Plaintiffs — Sarah Andersen, Kelly McKernan, and Karla Ortiz — allege, among other things, that Defendants infringed on their copyrights, violated the Digital Millennium Copyright Act, and engaged in unfair competition. 

In ruling on Defendants’ motion to dismiss, U.S. District Judge William Orrick quickly dismissed the copyright claims brought by McKernan and Ortiz against Stability because they hadn’t registered copyrights in their artworks — oops. 

Anderson, however, had registered copyrights. Nonetheless, Stability argued her claim of copyright infringement should be dismissed because she couldn’t point to specific works that Stability used as training images. The Court rejected that argument. It concluded that the fact she could show that some of her registered works were used for training Stable Diffusion was enough at this stage to allege a violation of the copyright act. 

The judge, however, dismissed Anderson’s direct infringement claim against DeviantArt and Midjourney. With DeviantArt, he found that Plaintiffs hadn’t alleged that DeviantArt had any affirmative role in copying Anderson’s images. For Midjourney, the judge found that Plaintiffs needed to clarify whether the direct infringement claim was based on Midjourney’s use of Stable Diffusion and/or whether Midjourney independently scraped images from the web and used them to train its product. Judge Orrick is allowing them to amend their complaint to do so. 

Because Orrick dismissed the direct infringement claims against DeviantArt and Midjourney, he also dismissed the claims for vicarious infringement against them. (By way of background, vicarious infringement is where a defendant has the “right and ability” to supervise infringing conduct and has a financial interest in that conduct.) Again, however, the Court allowed Plaintiffs to amend their complaint to state claims for direct infringement against DeviantArt and Midjourney, and also to amend their complaint to allege vicarious infringement against Stability for the use of Stable Diffusion by third parties. 

Orrick warned the Plaintiffs (and their lawyers) that he would “not be as generous with leave to amend on the next, expected rounds of motions to dismiss and I will expect a greater level of specificity as to each claim alleged and the conduct of each defendant to support each claim.” 

Plaintiffs also alleged that Defendants violated their right of publicity, claiming that Defendants used their names to promote their AI products. However, the Court dismissed these claims because the complaint didn’t actually allege that the Defendants advertised their products using Plaintiffs’ names. Again, he allowed the Plaintiffs leave to amend. (The Plaintiffs originally tried to base a right of publicity claim on the fact that Defendants’ platforms allowed users to produce AI-generated works “in the style of” their artistic identities. An interesting idea, but Plaintiffs abandoned it.) 

In addition, DeviantArt moved to dismiss Plaintiffs’ right of publicity claim on grounds that DeviantArt’s AI platform generated expressive content. Therefore, according to DeviantArt, the Court needed to balance the Plaintiff’s rights of publicity against DeviantArt’s interest in free expression by considering whether the output was transformative. (Under California law, “transformative use” is a defense to a right of publicity claim.) The Court found that this was an issue that couldn’t be decided on a motion to dismiss and would have to wait. 

What are the key takeaways here? For starters, it is fair to say that the judge thought that Plaintiffs’ complaint was not a paragon of clarity. It also seems like the judge thought that Plaintiffs would have a hard time alleging that images created by AI platforms in response to user text input were infringing. However, he seemed to indicate that it was more likely to allow copyright infringement claims based on Stability’s use of images to train Stable Diffusion to proceed.


Do You Own You?

It’s long been known that one of the pitfalls of being in the public eye is you don’t control your own image. Paparazzi can take photos of you that can be published anywhere, with the photographer getting paid, the media outlet generating revenue from ad sales and subscriptions, and the subject themselves neither seeing a dime nor having any control over how they look. That’s because traditionally, photographers have full copyright when they capture an image of a celebrity, particularly in public. Now, a bunch of new lawsuits are taking ownership even further out of celebrity hands, with photographers and their agencies suing stars who dare to post paparazzi photos of themselves on their social media accounts without licensing them first. 

There are plenty of celebs under fire at the moment, including LeBron James, Bella Hadid, and Dua Lipa. A few examples: Melrose Place and Real Housewives star Lisa Rinna posted on Instagram photos of herself that were taken by a paparazzo represented by the Backgrid agency; Backgrid is suing Rinna for copyright infringement. Rinna accuses Backgrid of “weaponizing” copyright law, while Backgrid retorts that once one of their paparazzi photos are posted without permission, magazines like People will be less likely to buy it because fans will have already seen it. Another case: model Gigi Hadid, who is being sued for copyright infringement by agency Xclusive-Lee over posting one of its images to Instagram. Hadid’s legal team asserts her post constitutes fair use because Hadid “creatively directed” the photo by choosing her outfit, posing and smiling, thus contributing “many of the elements that the copyright law seeks to protect.” Hadid also cropped the image when she posted it, which she says refocuses the photo on her pose and smile, rather than the photographer’s composition. 

Model Emily Ratajowski recently settled a suit brought by a photographer over a photo he took of her walking outside of a flower shop, her face completely obscured by a bouquet she was carrying. Ratajowski posted the photo on an Instagram story with the text “MOOD FOREVER,” intending to convey how she feels like hiding from paparazzi. While the case settled, the judge indicated her text served as a commentary on the celebrity/paparazzi dynamic that may have amounted to transformative use, protecting her from a copyright claim. 

This wasn’t Ratajkowski’s first battle with copyright law. She wrote a long essay on how it feels to be unable to control her image after a photographer took hundreds of nude photos of her early in her career, supposedly for a magazine editorial, and later published them as several books and showed them in a gallery exhibit — all without asking her permission or paying her. Ratajowski also had photos she posted to her Instagram account turned into “paintings” by renowned appropriation artist Richard Prince and sold for $80,000 each. She writes, “I have learned that my image, my reflection, is not my own.” 

It’s easy to sympathize with the celebrities’ position. While mere mortals often scorn celebrity complaints about their lack of privacy and the invasiveness of paparazzi — “hey, it comes with the territory!” — it seems like adding insult to injury to allow paparazzi to take photos of celebrities against their will and then demand the celebs pay to use the photos themselves.

Also, it’s not hard to see why Ratajkowski or others might feel victimized by someone in a position of relative power profiting from images without sharing those profits. (For what it’s worth, a number of states do have laws against revenge porn, but that’s not what we’re talking about here.)

In that vein, in the wake of #metoo, the celebrities’ position is also appealing because it’s not hard to see it as trying to subvert the male gaze by allowing the (mostly) female celebrity subjects to at least profit from or assert some element of control over the pictures they appear in. 

However, from an intellectual property law point of view, this is not how it works. 

For starters, copyright law is really clear. The copyright for photos rests with the person who took the photo. Posing for a picture is not subject to copyright protection, and copyright law doesn’t give the subject of a photo rights to the copyright. This is because a copyright comes into existence when it is “fixed,” meaning recorded on a piece of film or a memory card — and those are owned by the photographer, not the subject.

Moreover, copyrights trump any publicity rights that celebrities have. Article 1, section 8, clause 8 of the U.S. Constitution says that Congress has the power to enact laws to “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” This is because we as a society benefit from encouraging creators the right to create by allowing them to profit from their work. Celebrities and their lawyers would say that they too should be able to profit because they provided a service by appearing in the photograph and/or by being famous, and thus photoworthy. While the law isn’t supposed to get into judging the relative value of different artistic contributions, let’s be real: there is a difference between the creation of even a bad novel or artwork and smiling for a second into a camera lens on a step-and-repeat. 

What’s more, in contrast to copyright law, the right of publicity is — at least for now — a product of state law. This means that under established law, if there’s a conflict between the rights of a copyright holder and the rights of a celebrity to control his or her image under the applicable right of publicity, the copyright holder’s interests come first. 

This isn’t to say that this is the only policy balance that could be struck between the rights of the copyright holder and the rights of the subject of a photo, but it’s the one, for better or worse, that we currently have. So yes, the law is clear: if you’re a celeb, not only do you not profit from photos taken of you in public, if you want to use them yourself, you have to pay.

Also, look at it this way: none of us own everything about ourselves anymore (think about your personal data), nor do we profit from it. There’s no reason for the famous and the sort-of-famous to be different from everyone else. 

How True is the “True Story”?

In 1989, five Black and Latinx teenagers were prosecuted for and ultimately convicted of assaulting and raping a jogger in New York’s Central Park. The case brought the word “wilding” into the lexicon and drew national attention. 

This attention stemmed, in part, from the defendants’ youth, race, the lack of DNA evidence tying any of them to the assault, and inconsistencies in the defendant’s confessions — confessions eventually proved to be false. Because of these issues and the eventual confession of a serial rapist who took sole responsibility for the crime, the convictions of the youths — who became known as the “Central Park Five” — were vacated. 

For many, both in New York and beyond, this case symbolized New York at its worst and the wrongful use of the criminal justice system to target Black and Latinx men. 

This case is now in the news once again. This time it is because of a defamation case brought by Linda Fairstein, the former head of the Sex Crimes Unit of the Manhattan District Attorney’s Office, who was involved in the prosecution of the Central Park Five. Fairstein, who is now a successful mystery writer, is suing Netflix, writer/director Ava DuVernay, and writer Attica Locke for defamation over how she was portrayed in the miniseries When They See Us

When They See Us, is a four-part series dramatizing the Central Park Five’s experiences from their arrests through their release from prison. It portrays the criminal justice system as the villain and Fairstein’s character (played by Felicity Huffman) as the primary representative of the criminal justice system. Fairstein is shown as determined to see the five teenagers convicted regardless of inconsistencies pointing to their innocence. According to a recent decision in the Southern District of New York, which denied the defendants’ motion for summary judgment, “the character is portrayed as personally responsible for orchestrating nearly every aspect of the investigation of the [Central Park] Five.” 

Because of the judge’s recent decision, unless the case settles, it will go to trial over five allegedly defamatory scenes. (In 2021, the judge ruled that seven of the scenes Fairstein claimed were defamatory were not actionable.) Fairstein alleges each of these scenes portrays her as responsible for far more of the arrest and prosecution of the Central Park Five than she actually was. For example, one of the allegedly defamatory scenes could be understood to imply that Fairstein improperly delayed providing DNA evidence to the defense, while another shows her instructing the police to round up suspects in Harlem and harshly interrogate them. Fairstein maintains that she didn’t do those things and there’s nothing in the historical record to support the series’ claim that she did have that authority. 

It’s pretty clear that there were some very, very serious problems with the prosecution of the Central Park Five, that innocent men lost years of their lives in prison, that Fairstein played a role in their fate and, that to this day, she seems to be unrepentant, even continuing to indicate skepticism as to their innocence. 

Nonetheless, the judge said there was evidence that “by opting to portray Fairstein as the series villain who was intended to embody the perceived injustices of a broader system,” When They See Us “reverse-engineered plot points to attribute actions, responsibilities and viewpoints to Fairstein that were not hers” and were not reflected in “the substantial body of research materials” assembled in preparing the series. Netflix and its co-defendants, for their part, argue that the filmmakers are allowed to use some dramatic license in creating a portrayal of Fairstein that was substantially true.

Some important things to keep in mind about this case and fictional stories based on real events: 

  1. Even in dramatizations, you can’t ascribe things to real people that aren’t supported by the facts. Here, there will be an issue over whether the series’ portrayal of Fairstein is at least somewhat supported by the factual record. There will be a particular focus on the dissent of and comments by a judge on New York’s highest court who stated that Fairstein “deliberately engineered” a confession from one of the Central Park Five by not allowing a parent to be present.
  2. Fairstein is a public figure and, as such, to prevail at trial she will have to prove not only that certain statements in When They See Us were false, but that the statements were made with “actual malice.” The phrase “actual malice” is confusing because, for the most part, ill will is only a small part of the analysis. As used in the context of defamation, actual malice means that Fairstein will have to prove by clear and convincing evidence that the producers, writers, and director had subjective doubts about whether the statements at issue were false or probably false or that they created them with reckless disregard for whether they were true or not.
  3. The inclusion of a disclaimer is not a free pass. Here, Defendants did include a disclaimer stating that various elements had “been fictionalized for purposes of dramatization.” However, that disclaimer appeared only briefly at the end of each episode. This has to be contested against promotions for the series which included the statements “The story you know is the lie they told you” and “Based on the true story of The Central Park Five.”

However the case is resolved, it is clear that really, there are no winners here. 

WallStreetBets Makes the Wrong Bet

Our last post was about who owns a social media account: the company whose products are featured or the individual in the role associated with that account. This week we have another case at the intersection of social media and intellectual property. At issue here is who owns a trademark: the user who first created it or the social media platform (in this case, Reddit) where the mark is first used? 

In early-2012, Jamie Rogozinski launched a subreddit on Reddit called “r/WallStreetBets,” where users could share stock tips and other financial advice. Rogozinski was its first moderator. By early-2020, r/WallStreetBets had grown to more than a million subscribers and Rogozinski published a book titled WallStreetBets: How Boomers Made the World’s Biggest Casino for Millennials. Then, the pandemic happened and the subreddit exploded in popularity. Suddenly, WallStreetBets was a very valuable property.

On March 24, 2020, Rogozinski filed an application with the United States Patent and Trademark Office (“USPTO”) to register the mark WallStreetBets. Two weeks later Reddit notified Rogozinski that it had temporarily suspended his account because, in violation of Reddit’s terms of service, he had “attempted to monetize the community.” Subsequently, Reddit filed its own application to trademark WallStreetBets and sought to have the USPTO block Rogozinski from asserting a trademark in WallStreetBets. 

Rogozinski sued Reddit. He claimed, among other things, ownership of the trademark and that Reddit was infringing on his mark. The heart of his argument was that he owns WallStreetBets because he created the phrase and it is associated with him. Reddit moved to dismiss the complaint and, on July 11, 2023, U.S. District Judge Maxine Chesney granted Reddit’s motion. 

The court’s decision was based on the fact that the test for trademark ownership is “priority of use.” However, use alone isn’t enough. Rather, the party claiming ownership has to show that it was the first to use the mark in connection with the sale of goods or services. 

Here, while Rogozinski created WallStreetBets, the Court found that Reddit, not Rogozinski, had been using the mark in commerce starting with its inception on January 31, 2012, because any content created on the site becomes a product against which Reddit sells ads. According to Judge Chesney, to own a trademark, you must be “the first to actually use the mark in the sale of goods or services,” and none of the things Rogozinkski did to grow his subreddit “constitutes a use in commerce.”

One big problem with the court’s conclusion here is it could mean that because social media platforms like Facebook, X (formerly Twitter), Instagram, and the like have become so integral to marketing products, these companies could be seen as the owners of trademarks in products offered through their platforms. I suspect future cases will need to draw a line between products or services that are part of the social media platform (i.e. the subreddit at issue here) and the products or services that are entirely separate from the social media platform. 

Out With a Bang

Almost a year ago, we wrote about a dispute between bridal designer Hayley Paige Gutman and her former employer over who owned social media accounts bearing her name. With the prevalence of social media and its importance for marketing, it seemed like it was only a matter of time until this issue came up again. And here it is. 

Vital Pharmaceutical, which makes an energy drink called Bang (we’ve written about Bang before), filed for bankruptcy in 2022. As part of the bankruptcy, Vital sought a declaration that it, not its former CEO John Owoc, owned the social media accounts (TikTok and Instagram) and @BangEnergyCEO (Twitter/X). In response, Owoc claimed that he had used these accounts to cultivate a personality and the accounts belonged to him, not Vital.

The bankruptcy court granted Vital’s motion for summary judgment against Owoc. In reaching this conclusion, the Court created its own, new test for determining ownership of social media accounts because, in its view, the law had failed to keep up with the times. 

Specifically, the court examined: (1) the existence of a documented property interest, i.e. an employment agreement or similar stating that certain social media accounts belong to the company; (2) who controls access to the social media accounts; and (3) the use of the account, for example, whether the account is used to promote the company’s products or to create a persona that goes beyond the company’s products. 

Based on these factors, the bankruptcy court determined that despite the social media account names referring to Vital’s CEO, they belonged to the company and not its former chief executive. While there was no agreement documenting that the accounts belonged to the company (one point to Owoc), the court noted that Vital employees had access to and created and posted content for the accounts.  This included posting things without Owoc’s approval. In addition, a large majority of posts featured Bang-branded products rather than Owoc’s personal content, indicating that the accounts should be the property of Vital, and not Owoc. Two points to Vital. 

The court declined to follow the test used by another bankruptcy court in an earlier, similar case because that case predated “the emergence of the social media influencer, among other changes” in the use of social media. Specifically, the prior decision did not consider the existence of agreements that may establish the ownership of social media accounts (factor #1 in the Vital Pharmaceutical case). 

The big takeaway from all this is that brands need to be very careful about establishing and using social media accounts and, in a dispute over who owns an account, it’s important to establish how social media accounts are used. 

(Epilogue: On July 31 Vital was purchased by Monster Beverage, so we can all hope someone other than Owoc will carry on as @BangEnergyCEO.)  

Does X Rate a Trade Secret?

Earlier this summer, an attorney for the company once known as Twitter and now called X (more on the wisdom, or lack thereof, of this rebranding can be found here), sent a cease and desist letter to Meta (formerly known as Facebook). The letter accused Meta of engaging “in systematic, willful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property.” According to Twitter/X, Meta did this by hiring “dozens of former Twitter employees” that Meta knew “previously worked at Twitter; that these employees had and continue to have access to Twitter’s trade secrets and other highly confidential information; that these employees owe ongoing obligations to Twitter; and that many of these employees have improperly retained Twitter documents and electronic devices.” Twitter/X claimed that Meta relied on these former employees in developing Threads (a rival app to Twitter/X that Meta introduced in July).

Trade secrets can be an important source of value, but they generally get less attention than their more well-known intellectual property cousins — trademarks, copyrights, and patents.  This probably has something to do with the fact that there wasn’t a federal trade secret law until Congress enacted the Defend Trade Secrets Act in 2016 and, in order to exist (or be the subject of litigation) trade secrets have to be, well, secret. Meaning that if a company thinks someone has stolen theirs, management may be leery of litigation that could provide details about the secrets in public court filings.  

Does Elon Musk have a case against Meta? Maybe. 

While there is no one definition of a trade secret, it is described in California’s version of the 1979 Uniform Trade Secrets Act as “information, including a formula, pattern, compilation, program, device, method, technique, or process” that provides economic value to its owner and is not generally known outside of the business. In this Twitter/X vs. Meta affair, the letter to Meta fails to specify anything about the nature of the supposed trade secrets or “other intellectual property” that the former Twitter employees had access to. And while Twitter’s lawyer asserts that Meta “deliberately” assigned the former Twitter employees to work on Threads, the letter doesn’t actually identify any such employees. As a result, it seems pretty unlikely that there’s much basis for Twitter/X’s claim.  (In its response to Twitter’s letter, Meta states that no one on the Threads engineering team is a former Twitter employee.)

Twiter/X may also have a problem because, to qualify for protection, it has to have made “efforts that are reasonable under the circumstances to maintain its secrecy.” In the event of litigation, this would require it to show the time, effort, resources, and processes used to develop the secrets, as well as the value of the trade secrets and whether Twitter/X limited access to any secrets to those who need to know. This could be hard for Twitter/X if, numerous Twitter/X employees left the company with its trade secrets as the letter from Twitter/X’s lawyer indicates.  

Moreover, if there are any trade secrets, Twitter/X needs to act quickly because, in determining the existence of a trade secret, courts may consider how vigilant it was in protecting its purported trade secrets.  This means that if Twitter/X really believes its former employees are using its trade secrets to benefit Meta, it needs to quickly bring litigation (or arbitration) to enforce its rights.  However, the fact that more than a month has passed since the letter to Meta from Twitter/X’s attorney without any legal action suggests that there’s not really a basis for a trade secret claim, and this is all just bluster from the world’s richest man. 

Which no one would consider a secret at all. 

Toying With Rogers

The Rogers test is something we’ve talked about before (here and here).

This test comes from Rogers v. Grimaldi. In that case, the actress Ginger Rogers sued the studio that released a film titled Ginger and Fred, claiming the film’s use of her name implied that she sponsored the movie. Rogers lost in the lower court and appealed to the Second Circuit, which affirmed the lower court’s decision dismissing Roger’s case.

In its decision, the Second Circuit held that where the title of an artistic work includes a celebrity’s name “suppressing an artistically relevant though ambiguous[ly] title[d] film” on trademark grounds would “unduly restrict expression.” Thus, the Second Circuit concluded that trademark law does not apply unless the “title has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or content of the work.”

This test was meant to allow artists to use trademarks without permission when the use has artistic relevance to their work and does not explicitly mislead consumers into thinking the celebrity endorsed the work. Put another way, it aimed to avoid conflicts between the First Amendment and federal trademark law (a/k/a Lanham Act), at least when it comes to the name of a film. Legally speaking, this isn’t crazy.

However, there’s a problem. The Rogers test is made up. The Second Circuit’s opinion in Rogers doesn’t provide any citations for this test or explain where it comes from. This has become a problem especially because courts have expanded the Rogers test far beyond its original confines.

Notably, in 2020 the Ninth Circuit in Jack Daniel’s Properties, Inc. v. VIP Products LLC dismissed a case brought by the bourbon manufacturer on grounds that it could not satisfy Rogers in a case against the manufacturer of a squeaky dog toy shaped like a bottle of Jack Daniels. The Ninth Circuit found that the dog toy at issue was “expressive” because it “communicates a ‘humorous message.’” This is pretty far from where we started — a film directed by Federico Fellini that told the story of fictional performers named Ginger and Fred.

In early June the Supreme Court unanimously reversed the Ninth Circuit’s decision in Jack Daniel’s Properties, Inc. The Supreme Court held that where a trademark is being used as a trademark — that is, to indicate the source of goods or services — the trademark owner does not have to satisfy Rogers. It further concluded that the dog toy shape and label parodying Jack Daniels branding was just that: a trademark being used to indicate the source of the dog toy.

In its main opinion, which was unanimous, the Supreme Court went out of its way to say that it was not explicitly overruling Rogers and took no view as to its ongoing viability. However, five Justices filed concurring opinions to make certain points. Notably, three justices — Gorsuch, Thomas, and Barrett — wrote a one-paragraph opinion “to underscore that lower courts should handle Rogers v. Grimaldi… with care.”

Since then, the Supreme Court sent another case that involved the application of Rogers back to the Ninth Circuit for reconsideration in light of its Jack Daniels ruling. In that case — Diece-Lisa Industries, Inc. v. Disney Store USA, LLC — toymaker Diece-Lisa sued a bunch of Disney-affiliated companies for trademark infringement, claiming that the “Lots-O’-Huggin’” (aka “Lotso”) character in the 2010 film Toy Story 3 too closely resembles Diece-Lisa’s “Lots of Hugs” bear. (The Ninth Circuit had previously declined requests that Rogers should not apply or should be limited and had instead ruled that Diece-Lisa’s case had to be dismissed under the Rogers test.)

It will be interesting to see what the Ninth Circuit does here particularly as not only was Lotso a character in an expressive work, but Disney also sold dolls based on the movie character. If the case does make its way back to the Supreme Court, that court may have to confront the continuing viability of Rogers as well as what happens when there is both an expressive use (i.e. Lotso the movie character) and a more purely commercial use (i.e. the toy sold by Disney).

This case will serve as an interesting test of the Supreme Court’s ruling in Jack Daniels and may help to clarify the reach of that case.

Who Owns Taco Tuesday?

Did you know that every time you say “Taco Tuesday,” you’re using someone’s trademark?

At least for right now… But a new legal petition is looking to change that. In May, Mexican fast-food behemoth Taco Bell filed a proceeding with the United States Patent and Trademark Office (“USPTO”) against Taco John’s, a Wyoming-based fast-food chain that, unbeknownst to the average burrito lover, actually trademarked the phrase “Taco Tuesday” way back in 1989. 

Taco Bell’s petition is a rare work of legal writing — written, at times, in colloquial English, it has moments where it’s even pretty funny. One extract: “People like tacos on Tuesday. They just do. It’s even fun to say: ‘Taco Tuesday.’ Tacos have the unique ability to bring people together and bring joy to their lives on an otherwise mediocre day of the week.” (For another great example of this kind of “brand voice” legal writing, see this Netflix cease and desist letter.) In support of its campaign, Taco Bell has even enlisted LeBron James, who himself tried to trademark the phrase “Taco Tuesday” in 2019, but had his application rejected because the USPTO found the term to be too common to serve as a trademark. 

Suffice it to say that Taco John’s, which currently owns the trademark for “Taco Tuesday” in every state except New Jersey (don’t ask; that’s a topic for another blog post), is not amused. It responded to Taco Bell’s petition to cancel its trademark by noting, among other things, that Taco Bell is not seeking to cancel Taco John’s trademark in order to bring people happiness, but rather “in an effort to sell more tacos.” 

In a statement released by Taco Bell, James — the NBA’s all-time leading scorer and self-appointed taco promoter — said, “‘Taco Tuesday’ is a tradition that everyone should be able to celebrate. All restaurants, all families, all businesses — everybody…it’s a celebration that nobody should own.”

Taco John’s will probably lose the right to prevent others from using the phrase “Taco Tuesday” because, as the USPTO pointed out in connection with James’ application, the phrase has become ubiquitous and, as such, has lost its ability to function as a trademark. This is what’s called “genericide,” when trademarks cease to be associated with a brand and the brand loses its rights. 

However this spicy little kerfuffle pans out, it’s a lesson in what trademark owners should and can do to prevent genericide from happening to them (NB: the following tips may be most productively read while enjoying a chalupa supreme): 

  1. Keep in mind the purpose of a trademark. Trademarks are intended to indicate the source of a good or service. When, for example, the Xerox Corporation started making photocopiers, the intent was that a consumer who saw the word “Xerox” on a copy machine would know that the machine was made by the Xerox Corporation and not some other manufacturer like Pitney Bowes. 
  2. Use your mark as a trademark and make sure others do too. Problems arise when a trademark is used to describe the thing or the service itself instead of a specifically-branded thing or service. For example, Xerox ran into trouble when consumers started using the word “Xerox” to refer to both the process of copying a document and the copied document itself, instead of a machine made by Xerox or a copy made by a Xerox machine. Once upon a time, the company addressed this through a clever ad campaign informing consumers “when you use ‘Xerox’ the way you use ‘aspirin,’ we get a headache.” (This was a clever play on the fact that “aspirin” was once a brand name but became generic.) Their goal was to get people to use the word “photocopy” instead of “Xerox,” and while the impact on conversation in the copy room is certainly debatable, Xerox maintained its trademark.
  3. Have a generic noun ready to go. When you develop your trademark make sure you have a generic noun to be used with the trademark when communicating your brand to consumers, competitors, and the media. For example, Xerox is careful to say “Xerox photocopiers,” not “Xeroxes.”
  4. Enforce your rights. It’s great to get a trademark, but that’s just half of the battle. If a trademark ceases to be associated solely with the company that owns it, the mark no longer identifies the source of the goods or services. This means that to keep a trademark, the party that owns it has to constantly stop others from using its trademark and not wait for years until someone disputes their right to it. Stopping others can be through sending cease and desist letters, bringing an action to enforce trademark rights, or opposing efforts by another company to register a similar trademark.
  5. Use the Ⓡ symbol. This lets others know that a word or a phrase has been registered as a trademark. But remember: if the word or phrase hasn’t been registered as a trademark with the USPTO, you can’t use the Ⓡ symbol.
  6. Keep detailed records. This includes records of your  advertising costs, revenue figures, and unsolicited press mentions, all of which help to prove “acquired distinctiveness.” 

However the taco case turns out, rest easy knowing nothing can stop us from eating tacos on Tuesday . . . or on any other day.