January 24, 2023
In November, we wrote about the Hermès International vs. Rothschild “MetaBirkin” NFT lawsuit which, among other things, involves questions about whether an artist’s use of trademarks is protected under the Rogers vs. Grimaldi test for trademark infringement. Another case involving NFTs now raises some of the same issues, but with numerous interesting elements all its own.
Yuga Labs launched the Bored Ape Yacht Club (BAYC) NFTs in 2021. This project consists of 10,000 images of — you guessed it — bored apes generated by an algorithm. Sales of the NFTs in this project total more than $1 billion, making it one of the most financially successful NFT projects to date.
But, while BAYC NFTs became hot commodities among celebrities and wealthy collectors, Ryder Ripps, a conceptual artist, interpreted the BAYC’s logo and elements of the ape images as promoting racist stereotypes and incorporating Nazi and neo-Nazi imagery and ideas. In Ripp’s view, Yuga is trying to infiltrate mainstream society with toxic imagery through superficially harmless cartoon art. For example, Ripps noted: similarities between the BAYC and the Waffen SS logos; the ape skull on the Yuga Labs logo has 18 teeth and 18 is code for Adolf Hitler; and the expression “surf the Kali Yuga” is used by white supremacists.
He published these opinions online and, last May, launched an NFT collection called RR/BAYC.
The RR/BAYC NFTs link their own crypto tokens to the BAYC images and sell for about $200 each. According to Ripps’ website, the project “uses satire and appropriation to protest and educate people regarding The Bored Ape Yacht Club and the framework of NFTs.”
Unsurprisingly, especially because of the value of the original BAYC NFTs, in late-June 2022, Yuga Labs sued Ryder Ripps and others involved with RR/BAYC. Yuga Lab’s Complaint alleges false advertising, trademark infringement, and cybersquatting, among other things. According to Yuga Labs, the RR/BAYC “is a deliberate effort to harm Yuga Labs at the expense of consumers by sowing confusion about whether these RR/BAYC NFTs are in some way sponsored, affiliated, or connected to Yuga Labs’ official Bored Ape Yacht Club.”
Notably, despite elsewhere claiming that RR/BAYC NFTs infringed Yuga Lab’s copyrights, the Complaint does not include a claim for copyright infringement. Nor does it include a claim for defamation against Ripps and others involved with RR/BAYC.
Ripps and the other defendants in the lawsuit moved to dismiss the Complaint. They argue RR/BAYC is an expressive artistic work protected by the First Amendment and, therefore, not actionable under Rogers. They also claim that Yuga Lab’s Complaint must be dismissed because RR/BAYC buyers “understood that their NFT was being minted as a test against and parody of BAYC, and no one was under the impression that the BAYC NFTs were substitutes for BAYC NFTs or would grant them access to Yuga’s club. They explicitly acknowledged a disclaimer when they purchased [the NFTs].” Ripps also filed an anti-SLAPP motion, claiming Yuga Labs is trying to silence him through its lawsuit.
In December, the Court denied defendants’ motions. It held Rogers did not apply as the RR/BAYC NFTs did not “express an idea or point of view, but, instead, merely ‘point to the same online digital images associated with the BAYC collection.’” It also concluded defendants’ use of Yuga’s marks isn’t nominative fair use because defendants are using the marks to sell their own NFTs, not plaintiff’s NFTs.
As for the anti-SLAPP motion, Judge Walter wrote, Yuga Labs had “not brought claims against Defendants for defamation, slander, or libel. Instead, Plaintiff’s claims are limited to and arise out of Defendant’s unauthorized use of the BAYC Marks for commercial purposes.”
And that’s what’s so interesting here: Yuga sued solely for trademark infringement and not for defamation or copyright infringement. Why? On defamation, maybe to prevent anyone from looking too deeply at whether Yuga Labs’ imagery is, in fact, racist or relies on white supremacist imagery and ideas. However, this strategy seems to have backfired as the Court recently required the founders of Yuga Lab to sit for a deposition. Presumably, defendants’ lawyers used this opportunity to specifically address this issue.
On copyright, it seems likely that Yuga Labs didn’t bring a claim because any copyrights belong to the NFT purchasers, not Yuga. Yuga may have also avoided bringing a copyright claim to skirt the issue of whether algorithm-generated NFT collections like BAYC are sufficiently original to qualify for copyright protection.
In any event, stay tuned. If the parties don’t settle, this case will likely go to trial later this year.
January 10, 2023
Among the most frequent — and sensitive — disputes in business are those between co-founders or co-owners of a company. These conflicts come in all shapes and sizes, but some types are most prevalent. Because they can be so contentious and emotionally charged, it’s best to handle them carefully and quickly before they fester and cause irreversible damage. Here are the ones we’ve seen the most, along with a few paths parties can take to resolve disputes and prevent worst-case scenarios.
Different Perceptions, Divergent Goals
Credit and recognition can be key drivers of conflict: When junior owners of an organization feel like their recent contributions aren’t being recognized or, conversely, when senior owners feel they’re not being given their due for past efforts that grew the business into what it is today. In other conflict scenarios, a senior owner wants to keep the business on its traditional course while a junior owner is anxious to expand into new areas. Also common are situations when a senior owner is moving toward retirement, but can’t let go of his or her baby and hand over responsibility to junior owners.
Attorneys are a great resource for co-founders and co-owners for help in these situations, but there are other options business owners can turn to in addition. Mediators work with conflicting parties to lay out different means of resolving disputes while evaluating the advantages and disadvantages of each. Business coaches can suggest new methods for the owners to execute their roles, or facilitate difficult discussions around the issues at hand and identify ones that haven’t yet been addressed. Similarly, an external business consultant might be able to help balance divergent goals, discover unseen opportunities or chart a new course for a business that everyone can align on.
Expenses: Business or Personal?
Small business owners often blur the line between business and personal expenses — dining out, gym memberships, travel, etc. — and this can cause conflict when two or more partners are involved. It quickly becomes a problem when co-owners or co-founders have different ideas about what is or isn’t an appropriate use of the company credit card, or if one partner feels another is abusing it or simply deriving more benefit than him or herself.
In these cases, an accountant may be able to help explain what is considered appropriate use of corporate funds, determine how co-owners use them when the expense is questionable and install mechanisms to be sure no one is taking advantage.
Unequal Effort
One of the most common causes of dispute: when one founder or owner, rightly or wrongly, feels like another founder or owner isn’t doing his or her fair share of the work.
When one partner believes they are doing more work than the other, recognize that things shift over time and while you may be carrying more of the load today, the situation may be reversed in a few months. Time is a great leveler.
Substance Use
A leading cause of someone not pulling their weight, this becomes a serious concern when a co-founder or co-owner is unable to productively participate in the operation of the business due to their substance use.
When this is the problem, it may be most effective to first consult a doctor or other medical professional, while also considering mediation or a business coach.
Overall, if you are a co-owner or co-founder involved in a dispute with your partner(s), the key is to talk to them, listen and try not to judge. In many cases like those described above, the issues are not new: they’ve been present in the business for a while, the co-owners or co-founders have discussed them repeatedly and feel like they’ve had the same conversation over and over again without getting anywhere.
That’s frustrating, and frustration leads to resentment and, many times, anger and rash decision making. Early intervention is key to try and resolve the issues before too much resentment builds. And wherever you are in the process, sometimes taking a step back and thinking about what is really motivating the other party, or why they believe what they believe, can provide fresh insight and help break a deadlock.
December 13, 2022
Every time we post personal data on a social media platform, we’re making information about ourselves public. But really, what seems like public property that anyone can access, in fact, sometimes becomes someone else’s private property — as an interesting, ongoing case about who controls such data illustrates.
hiQ is a self-styled “people analytics” company. Its business model involves scraping LinkedIn users’ public profiles, analyzing the data with a proprietary algorithm, and selling the results to employers looking to retain and train employees.
Unfortunately for hiQ, such data scraping is prohibited by LinkedIn’s User Agreement.
In May 2017, LinkedIn sent hiQ a cease and desist letter. It cited the violation of its User Agreement and demanded that hiQ stop its use of LinkedIn users’ public profile data. In response, hiQ filed suit in the Northern District of California and sought an injunction barring LinkedIn from claiming that hiQ was violating the Computer Fraud and Abuse Act (CFAA), the Digital Millennium Copyright Act, and California law.
The District Court granted hiQ’s injunction in August 2017.
In reaching this conclusion, the District Court held that hiQ’s interest in the survival of its business, which was threatened by LinkedIn’s demand that it cease and desist from scraping public LinkedIn data, was greater than LinkedIn’s interest in protecting the public profiles of its users. The Court also held that the public interest favored hiQ because LinkedIn was, in effect, seeking to eliminate hiQ as a competitor and establish a monopoly. (At the time it sent the cease and desist, LinkedIn was exploring providing services similar to hiQ’s.)
LinkedIn appealed the injunction to the 9th Circuit, which affirmed the lower court’s ruling in favor of hiQ. LinkedIn next appealed to the U.S. Supreme Court, which vacated the 9th Circuit’s ruling and remanded the case. In April 2022, the 9th Circuit again affirmed the District Court’s preliminary injunction in favor of hiQ.
While the issue of the injunction went to the 9th Circuit (twice) and SCOTUS (once), the parties were busy conducting discovery. At the end of discovery, each party filed a motion for summary judgment and the District Court ruled on these motions in November.
On the whole, despite winning the initial battle over the injunction and the fact that it did score a few wins at the summary judgment stage, it’s safe to say that hiQ definitely came out on the losing end of things. In large part this is because LinkedIn’s cease and desist seems to have quite a chilling effect; it caused hiQ to lose funding and employees.
hiQ’s losses didn’t end there. The District Court found that hiQ agreed to the terms of LinkedIn’s User Agreement, when it ran ads and created accounts on LinkedIn and, contrary to hiQ’s position, the User Agreement unambiguously bars scraping.
However, the Court did allow hiQ to proceed to trial on the issue of whether LinkedIn’s claims under the CFAA are barred by a two-year statute of limitation because there was evidence that LinkedIn employees were aware of hiQ’s activities for more than two years before it filed suit in 2017. At trial, a jury will have to determine if these employees’ knowledge can be imputed to LinkedIn.
Despite hiQ being allowed to proceed to trial, overall LinkedIn came out ahead because, regardless of the outcome of this case, it effectively seems to have not only disposed of any competition from hiQ, but also effectively limited the ability of other entities that might try to monetize information that we, the public, freely provide to LinkedIn.
November 29, 2022
Some people relish a fight. Most, however, don’t — especially when the conflict results in litigation. This is especially true for business owners because litigation costs money, takes time and attention away from running the business, and can be emotionally exhausting. If you do find yourself in litigation, what should you do? Here are 10 techniques for resolving disputes.
- Recognize that most disputes are resolved by the parties before a trial. While reliable statistics are almost impossible to come by, it’s a fact that most disputes do get resolved without a trial. Remember that and take heart: no matter how bad things seem at first or how unpleasant the process may become, the odds are overwhelmingly in favor of a pre-trial resolution.
- Acknowledge your feelings. Anger, despair, and frustration are just a few of the emotions likely to arise during a dispute. Rather than try to hide from this discomfort, recognize the feelings as they occur, talk about them with people you trust, and work to use them, or get to a place where these feelings aren’t ruling the day.
- Know yourself and the other side. When a dispute arises, spend some time thinking about what’s motivating everyone involved. Often it just comes down to money, but in many cases, there’s more lurking beneath the surface. What is really driving you? What do you think they want? Justice? Revenge? Admission of responsibility? Determine what those motives may be for both sides. It will be a huge help defining a path to resolution.
- Problem solve. Now that you’ve identified the motives underlying the dispute, spend some time thinking about possible resolutions to both the spoken and unspoken issues. Don’t just do this for yourself: imagine resolutions that would satisfy you and the other side too.
- Think about what’s really important. When imagining a resolution, identifying and ranking priorities can clarify what’s most important to you (and what’s not). This can also help you find solutions you may have overlooked.
- Envision different solutions. Make a list of potential outcomes and think about the impact each will have on your business in three months, six months and a year.
- Talk. Communication with the other party in a dispute is critical, and in today’s world of email and text nuance is often lost. What’s more, a lot of people find it easier to be a jerk by email or text than in person. Avoid this by insisting on in-person or virtual meetings where you can communicate face-to-face.
- Sometimes skilled third-parties can help you get to a resolution. Lawyers who handle a lot of disputes have seen it all before (really!) and may have fresh ideas and different perspectives that can help bring about the best possible outcome. Similarly, skilled mediators are experts at resolving disputes, often by working with the parties to identify the risks and costs of continued conflict and eventual litigation.
- A good resolution usually means everyone is unhappy. It’s a maxim you’ll hear from lawyers and you know why? Because it’s true. Compromise is generally unwelcome but it’s at the core of any dispute resolution, and compromise inevitably means that everyone has to give up something they’d rather not. But people usually find that once all is said and done, the compromise was worth it.
- Focus on the future, not the past. Try to forget what happened to cause the dispute and focus on what’s in front of you. Put aside thoughts of who is to blame. What’s past is past, and you’re not going to be able to change it. That doesn’t mean you shouldn’t fight for what’s right or the best possible outcome. Just don’t let feelings about what happened in the past prevent you from attaining a resolution in the present that you’ll realize, in the future, was a satisfactory outcome.
November 15, 2022
Over the past few years, NFTs have emerged from nowhere to become a big deal — even if a lot of people are fuzzy on the details of what an NFT is. And, as with any new creation, especially one that reaches across art, entertainment, finance and culture, conflicts over NFTs raise new legal issues. On this, I’m especially fascinated by Hermès International vs. Rothschild, 22 Civ. 384 (S.D.N.Y.). It raises so many questions: What is art? Who is an artist? What is an NFT? How do art and commerce interact and where does the First Amendment fit into all this?
This is a very “meta” case (in more ways than one).
It’s a simple story. In 2021, Mason Rothschild, a Los Angeles-based digital artist, launched his “MetaBirkin” project. The project involved the sale of 100 NFTs, each linked to a digital image created by Rothschild. The images are of imaginary, Birkin-style bags covered in distinctively colored fur. (Birkin bags are very expensive handbags made by Hermès, the French luxury fashion brand. They are often made from leather or exotic animal skins and can cost more than $100,000.)
Rothschild promoted MetaBirkins on social media with hashtags like #NotYourMothersBirkin and #MetaBirkin and created a Discord group for followers. His stated intention was to use the NFTs to raise awareness of the fashion world’s “fur-free” initiatives and promote the use of ethical textiles. Sales of these NFTs quickly took off.
Hermès was not amused and sent Rothschild a cease and desist letter. A few weeks later, it filed suit, claiming, among other things, trademark infringement, unfair competition and cybersquatting stemming from the use of “MetaBirkin” and hashtags containing the word “Birkin.” OpenSea, the world’s largest NFT marketplace, removed the MetaBirkins from its site and resale prices, which had reached as high as $46,000 for a single NFT, plummeted.
Hermès makes several arguments, but its central claim is that Rothschild is misleading consumers into thinking Hermès authorized the NFTs and otherwise trading on Hermès’ goodwill. Here, the company points to posts on Rothschild’s social media accounts and in the news indicating confusion over Hermès’ relationship to MetaBirkins.
It also vehemently argues that the Court should ignore Rothschild’s images of fanciful, fake fur covered Birkin-style bags because “[t]he MetaBirkin NFTs are data recorded on the Ethereum blockchain,” which Rothschild could swap out for something completely different and unrelated. In other words, Hermès argues Rothschild’s work is just bits of code that can be disassociated from the images. Thus, according to Hermès, his work is not art and, therefore, outside the scope of the First Amendment. In support of this claim, Hermès notes that when the MetaBirkins were first minted, the image was covered in a shroud and didn’t show the actual picture being sold. It also repeatedly claims that Rothschild is a marketer and not an artist.
In response, Rothschild asserts the First Amendment allows him to make and sell art that depicts Birkin bags. In his words: “I am not creating or selling fake Birkin bags. I’ve made works of art that depict imaginary, fur-covered Birkin bags. I have the right also to use the term ‘MetaBirkins’ to describe truthfully what that art depicts, and to comment artistically on those bags and the Birkin brand.” What’s more, he goes on, “[t]he fact that I sell the art using NFTs doesn’t change the fact that it’s art.”
Mason Rothschild also claims his use of “Meta” is an indication that the images are part of a commentary and argues that Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989) requires the Court to dismiss Hermès’ case.
As a refresher, the dancer Ginger Rogers sued the makers of a movie called “Ginger and Fred,” claiming that the movie’s use of her name impermissibly implied that she sponsored the movie, which was about fictional cabaret performers named Ginger and Fred. The Second Circuit rejected her claims. It held that the First Amendment requires courts to dismiss trademark claims involving artistic works unless the public’s interest in avoiding consumer confusion outweighs the public interest’s in free expression. With celebrity names in titles, the court held that a trademark claim must be dismissed unless “the title has no artistic relevance to the work whatsoever, or if it has some artistic relevance, unless the title explicitly misleads as to the source or content of the work.”
Based on this, Rothschild argues that the images associated with his NFTs have sufficient artistic content to bring this case within the ambit of Rogers and he has not explicitly misled anyone about the source of the NFTs. Specifically, he notes that it is not in his interest to have consumers think the NFTs were created by Hermès because he wants to be credited as the artist.
It’s hard to say where the court is going to come out on this, but it doesn’t seem terribly likely that Hermès will prevail here. Courts don’t want to be in the business of deciding what is and isn’t art and are likely to err on finding something is art. Moreover, the lengths to which Hermès goes to try to disassociate the images from the NFTs would seem to support a conclusion that the images are, in fact, art.
And, while it’s true that Rothschild could substitute the images linked to the NFTs, that’s pure speculation and doesn’t bear any relationship to the actual facts here. If anything, the fact that in the minting process the NFTs were associated with images on a pedestal covered with a shroud make it seem even more like these digital images are, in fact, art because that specifically calls to mind the unveiling of a statue or other artwork.
Thus, for Hermès to prevail, it’s going to have to show the NFTs explicitly misled people about their source. It’s hard to see that happening.
This will be fascinating to see where the court comes out and watch for this case’s impact on the new, evolving world of NFTs, the market for them, and how they further develop.
October 27, 2022
A lot of people strive to make decisions with cool, clear, rational minds. However, it’s really hard to avoid that most primal force: emotion. This is especially true in stressful situations — and few situations are more stressful than litigation. At times, this means that even the most rational people want an outcome that is not only just: they may also want one that provides them with a sense of victory or revenge or they just want the whole thing to go away.
This means that a big part of our role in advising people in disputes is helping them manage the emotional turmoil and stress of a dispute or litigation. We do this by, among other things, having clients identify their primary goals so they can focus on what is most important, while, perhaps, shining a light on how their emotions and fears may push them away from these goals. Doing this work at the start often helps clients position themselves to best resolve disputes to their satisfaction and can make the entire process more efficient.
We also try to help clients think through the decision-making process and recognize the emotions raised by a particular situation. This helps clients avoid rushing to a conclusion just to get the stress over with, which can have big ramifications, especially when it comes to deciding when and whether to settle.
In practice, this means that we help clients understand not just the law, but what they’re going through and what they’re feeling. In other words, a big part of our job is making sure clients don’t get in their own way. We do this by helping clients dissect their emotions and how that fuels their decision-making process. Is it fear? What exactly are you afraid of? Is it anger? Is that anger clouding your judgment, impelling you not to settle when that’s the best call? Is it the anticipation of potential relief, of just getting this all behind you as quickly as possible, that might cause you to make a rash decision? Looking into the future, how will you feel one year, two years from now if you do X? What could cause you to regret that or feel good about that? We’ll talk about what you’re experiencing, try to identify the dominant emotions and what’s causing them, and use the knowledge to make decisions that will quell fears, satisfy desires and help achieve the best resolution.
Given that most disputes settle, a key aspect of this decision-making process is also figuring out the value of settling. Are you worried that the costs of continued litigation outweighs the potentially greater financial result of not settling now? How did you make that determination? At the beginning, we approach this by assessing the case. We work backwards from the client’s goal, examine the possible rewards and costs — and, again, the emotions associated with both. Together, we establish the basis for the entire process going forward that enables us to stay firm, focused and on track.
October 7, 2022
When she gives her employer broad rights to use her name even after her employment ends.
Of course, of course.
This may sound like a bad (or completely nonsensical) Mr. Ed joke, but allow me to explain. Here is the story of renowned wedding dress designer Hayley Paige Gutman, who recently announced she will henceforth be known as Cheval (aka “horse” in French). Why? Because, as a result of an agreement with her former employer, she no longer owns the Instagram account she created and which bears her name.
This case is particularly interesting to me because (1) it shows how existing laws — here, contract and the work-for-hire doctrine — are applied to new platforms and novel situations, and (2) the Court went to great lengths in an attempt at resolution, but ultimately, simply went back to existing laws to reach a decision.
Let’s begin with the facts: In 2011, Gutman entered into an employment agreement with a company named JLM Couture, which designs and manufactures luxury bridal gowns. The agreement stated Gutman would neither compete with her employer nor use her name in connection with wedding dresses and bridal items during its term and for two years after its termination. Gutman also agreed that JLM would own everything she created in connection with her employment and could trademark her name — some pretty broad rights. In exchange, JLM promised to invest money into the “Hayley Paige” brand and pay Gutman a salary and royalties. Of course, this being the modern age, a vital marketing element for the venture was the Instagram account @misshayleypage that Gutman created shortly after entering into the contract and which was used to promote the dresses she designed for JLM.
Everything was fine — at least, from a legal standpoint — until 2019 or 2020, when negotiations over a new contract broke down. Gutman locked JLM out of the Instagram account and began using it to promote non-JLM products. JLM sued Gutman for, among other things, breaching her agreement by taking over the account; JLM also sought to prevent Gutman from using the @misshayleypage Instagram unless approved by JLM. The lower court agreed with JLM.
Gutman appealed and the Appellate Court found the lower Court wrong to restrain Gutman without first deciding whether JLM could show it owned the social media accounts and sent the case back to the lower Court to figure that out.
Once there, Gutman argued this question was answered by the fact that she created the Instagram account as a personal account. The lower Court was not convinced. It said that the issue needed to be resolved by looking at: (1) how the Instagram account was described to the public; (2) how it was used; and (3) if JLM employees accessed it. Based on this, the Court held that JLM was likely to succeed on its claim that it owns the Instagram account or, at least, show it had superior rights to the account because it linked to JLM websites and was regularly used to promote JLM’s business and communicate with its customers.
The Court also noted that, under her contract with JLM, Gutman agreed that anything she developed in connection with her employment belonged to JLM. To me, it seems like the Court could have saved itself a lot of time by starting there. In my view, there was no need to dissect the use of the Instagram account in order to determine ownership just as there would have been no need to debate ownership of, say, a printed JLM catalog featuring a dress designed by Gutman. The employment agreement covered all materials related to the Hayley Paige brand regardless of media type or who initiated its creation.
As a result, the “Hayley Paige” brand and Instagram account continue to be owned by JLM, and Gutman is operating as Cheval. I’m really curious to see whether the @misshayleypaige followers will follow her Cheval Instagram and whether she will be able to monetize this new persona. Will the answer be yay or… neigh?
Sorry, it had to happen.
August 11, 2022
The Southern District of Florida recently issued a decision in a case that brands using social media influencers should note. While the decision was not an all out loss for the brand, it did conclude that the brand could be liable if the copyright owner was able to show the brand profited from its social media influencers’ use of copyrighted materials.
By way of background, Universal Music is suing Vital Pharmaceuticals, Inc., which makes an energy drink called Bang, and its owner, Jack Owoc, for copyright infringement. The lawsuit alleges that Bang and Owoc directly infringed on Universal Music’s copyrights with TikTok posts that included Universal Music’s copyrighted music. Universal Music further claims Bang was contributorily and/or vicariously liable for videos posted by social media influencers featuring Bang. In response, Bang and Owoc claimed that the TikTok videos were covered by TikTok’s music licenses and that Bang could not control what its influencers posted to TikTok.
As an introduction (or refresher), direct infringement is where someone uses copyrighted materials that belong to someone else. In contrast, contributory infringement is where someone encourages another to use copyrighted material belonging to a third-party, and vicarious infringement is where a party profits from another’s direct infringement and does not stop that direct infringement.
In support of its claims, Universal Music introduced evidence that Bang encouraged influencers to create and post TikTok videos promoting Bang’s products with Universal Music’s copyrighted works. Universal Music claimed that, because Bang had the power to withhold payment to its influencers, it could control whether influencers used Universal Music’s copyrighted works.
On Universal Music’s motion for summary judgment, the court held that Universal Music established that Bang and Owac directly infringed on its copyrights. Specifically, the court found that Bang and Owac directly copied Universal Music’s copyrighted works.
The court went on to find that Universal Music was not entitled to summary judgment on its claim of contributory infringement as it had not shown that Bang had any input into the music used by its influencers.
The court further concluded that Universal Music established that Bang had sufficient control over its influencers to prevail on a claim of vicarious infringement. Despite this finding, the court denied Universal Music’s motion for summary judgment because Universal Music had not shown that Bang received any financial benefit as a result of its influencers’ posts. As a result, this issue will have to await trial when Universal Music can introduce evidence as to whether Bang benefited.
Despite the fact that this decision was not an all out loss for Bang, brands should definitely keep it in mind when working with influencers.
July 14, 2022
On June 9, 2022, Senators Patrick Leahy (D-VT) and Thom Tillis (R-NC), the Chair and Ranking Member of the Senates Judiciary Committee’s Subcommittee on Intellectual Property, sent a letter to the Director of the United States Patent and Trademark Office (PTO) and the Director of the United States Copyright Office (Copyright Office) asking them to complete a study on various issues related to non-fungible tokens (NFTs). The non-exhaustive list of topics in this letter includes:
- What are the current and future intellectual property and intellectual property-related challenges stemming from NFTs?
- Can NFTs be used to manage IP rights?
- Do current statutory protections for copyright, for example, the Digital Millennium Copyright Act, apply to NFT marketplaces, and are they adequate to address infringement concerns?
On July 8, 2022, the PTO and Copyright Office responded to the Senators. In their response, they stated that they would consult with relevant stakeholders and complete the requested study.
While the list provided by the Senators is a good starting place, the fact that they gave the PTO and Copyright Office until June 2023 to complete the study, means that it’s going to be a while until we have any additional information from the PTO and Copyright Office. Moreover, while the PTO and Copyright Office certainly have a role to play here, the legal framework will continue to develop as Courts rule on cases involving NFTs.
March 8, 2022
A good part of my practice involves disputes between company co-founders or co-owners. Although people seem to think I’m crazy when I say this, it’s a type of work I find particularly satisfying because it requires a combination of legal knowledge, problem-solving, and empathy.
As a result, I’m frequently asked for advice about what to do in this type of situation. While there’s no perfect answer, here are my top five tips:
One: If you have documents governing the company, you need to review them. Ideally, there’s a written document that says how the company and its owners are supposed to operate and that document addresses your circumstances.
If that’s not the case for you, don’t panic! This is very common. A lot of people never get around to documenting how a company is going to operate.
In the absence of a formal agreement signed by all of the company’s owners, there are some other sources that may clarify things. For starters, the law of the state where the company was formed may provide some guidance. In addition, emails, texts, and other communications between co-owners, as well as past practices, can also help fill in gaps.
Two: Recognize that even if you have straightforward and clear documents, there’s almost always a significant human element involved in resolving this kind of dispute. This means it’s important to be clear about what you want and what you’re willing to give up. For example, is your prime goal ousting a co-founder or co-owner? Or, are you more interested in reframing your relationship and setting up new lines of communication? Do you simply want to exit the business and move on from a relationship that has become toxic?
Three: Think about what you want to do if you can’t get your preferred outcome and develop a list of priorities.
Four: Consider the possible roadblocks to a resolution. Some are obvious — having enough money to buy out a co-founder or an operating agreement provision that requires unanimity. Others are less obvious. For example, are you concerned about letting go and moving on to the next thing? Is your co-owner someone who enjoys fighting?
Once you’ve identified these roadblocks, think about what you can do to remove them or lessen their impact.
Five: Work with a skilled professional or professionals. This can be a lawyer, but it can also be a mediator or a coach. The important point is that you have an outsider who can serve as a sounding board and suggest options and different strategies.
Please reach out if you have any questions.
