Donald Graham’s Copyright Infringement Suit against Richard Prince Allowed to Go Forward

People interested in the U.S. fair use doctrine owe appropriation artist Richard Prince gratitude for providing several interesting fair use cases to monitor and comment about.

Prince has been the defendant in several high profile cases in the Second Circuit (see here and here). He famously won the Second Circuit Cariou v. Prince case (see here), where the Court of Appeals found that Prince’s  use of Patrick Cariou’s photographs to create his thirty paintings and collages featured in his Canal Zone exhibition was fair use, as it was transformative.Prince Street Photographer Donald Graham filed a copyright infringement suit against Prince in 2016 (see here and here), claiming that Prince’s use without permission of Graham’s Rastafarian Smoking a Joint photograph, to create an Untitled (Portrait) featured in Prince’s New Portraits exhibition, was copyright infringement. Prince claims it is fair use.

On July 18, U.S. District Judge Sidney H. Stein from the Southern District of New York allowed the case to go forward, as, while granting Prince’s request to dismiss Graham’s demand for punitive damages, he denied Prince’s motion to dismiss the case. The case is Graham v. Prince, 1:15-cv-10160.

Judge Stein noted that, because the fair use defense is fact-related, discovery will be necessary to conduct the fair use inquiry. Therefore, the case cannot be dismissed and will have to go forward. Judge Stein quoted the Second Circuit in Cariou v. Prince, which stated that finding whether a particular use is fair or not requires “an open-ended and context-sensitive inquiry.”

Prince used Graham’s work almost in its entirety, when he printed and exhibited the original work as originally cropped and posted on Instagram, without Graham’s permission, by another Instagram user, then reposted by yet another user and finally reposted by Prince on his own Instagram account. Prince added the nonsensical comment “ReCanal Zinian da lam jam,” followed by an emoji. Is this add-on enough to make Prince’s work transformative enough to be found fair use?

Prince argued that the use was transformative as it added new messages such as “a commentary on the power of social media to broadly disseminate others work, an endorsement of social media’s  ability to generate[ ] discussion of art,”or a “condemnation of the vanity of social media.”

Judge Stein was not convinced, finding “evident” that Prince’s work is not “so aesthetically different”from the original work and thus not transformative enough. Untitled (Portrait) does not manifest “an entirely different aesthetic” from the original work, as required under Cariou. Unlike the works featured in the Canal Zone exhibition, Untitled (Portrait) does not render the original work, according to Judge Stein, “barely recognizable” as Princes works did in Cariou.

Instead,

“[t]he primary image in both works is the photograph itself… Untitled simply reproduces the entirety of Graham’s photograph –  with some de minimis cropping – “ in the frame of an Instagram post, along with a cryptic comment written by Prince… There is no question that, notwithstanding Prince’s additions, Graham’s unobstructed and unaltered photograph is the dominant image in Untitled.”

Judge Stein concluded that “[b]ecause Prince’s Untitled is not transformative as a matter of law, the Court cannot determine on a motion to dismiss that a “reasonable viewer” would conclude that Prince’s alterations imbued the original work “with new expression, meaning, or message,” quoting the U.S. Supreme Court Campbell v. Acuff-Rose Music 1994 case.

 Given Prince’s  use of essentially the entirety of Grahamâ’s photograph, defendants will not be able to establish that Untitled is a transformative work without substantial evidentiary support. This evidence may include art criticism, such as the articles accompanying defendant’s briefing, which the Court may not consider in the context of this motion.”

Judge Stein called Cariou v. Prince a “prequel to this action.” However, his fair use analysis does not bode well for Prince, who may this time be found to have appropriated a bit too much. To be continued…

Image is courtesy of Gryffindor under a  CC BY-SA 3.0 license.

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New York State Fails to Extend the Scope of its Right of Publicity Statute

New York State has a statutory right to publicity, New York Civil Rights Law 50 and 51. It protects the right of publicity of a “person, firm or corporation” in order to prevent “uses for advertising purposes, or for the purposes of trade”of “the name, portrait or picture of any living person without having first obtained the written consent of such person.”

The New York legislature recently tried to expand this right, but this attempt was so far unsuccessful, and the legislature is now in recess.

Assembly Bill A08155, introduced on May 31, 2017, proposed to establish a right of publicity for both living and deceased individuals. It also proposed that an individual’s name, voice, signature and likeness would be a freely transferable and descendible personal property, making the right of publicity a property right more than a privacy right, as it is now.

An expansion of the scope of the law

Readers of the blog may remember that Lindsay Lohan claimed that flashing the V sign was part of her persona and was thus protected by New York right of publicity law. She was unsuccessful as the scope of New York’s ight of publicity law is narrow.

The bill would have considerably expanded the scope of the law, as it would have also have protected the “likeness” of an individual, which it defined as “an image, digital replica, photograph, painting, sketching, model, diagram, or other recognizable representation of an individual’s face or body, and includes a characteristic.”

The bill defined the “characteristic” of an individual as “a distinctive appearance, gesture or manne “ So, Lindsay Lohan’s V sign could arguably be protected would the bill been enacted.

The geographic scope of the statute would also have been considerably extended. The bill would have protected the right of publicity of a deceased individual, for forty years after the death of the individual, and this”regardless of whether the law of the domicile, residence or citizenship of the individual at the time of death or otherwise recognizes a similar or identical property right.” This could be interpreted as meaning that the law would have applied to virtually anyone in the world.

A right of publicity transferable and descendible

The bill considered the likeness to be personal property, freely transferable

“A living or deceased individual’s name, voice, signature and likeness, individually and collectively known as his or her right of publicity, is personal property, freely transferable or descendible, in whole or in part, by contract or by means of any trust or testamentary instrument.”

If an individual would have transferred his right of publicity, there could have been a risk of losing control over the use of one’s  likeness, even for unsavory use, unless the contract transferring such rights would have been carefully written to protect the individual against such occurrence. One can imagine that a young, talented and beautiful, but nevertheless impecunious individual could have signed up his right of publicity in exchange for money badly needed at the time. Â

New York State, unlike California, does not recognize that deceased individuals have a right to publicity and the bill would have provided such right. The bill detailed at length how such right would have vested to the heirs, whether by will or, in the absence of a will, under the laws of intestate succession. The bill also specified that the rights thus inherited could have been “freely transferable or descendible by any subsequent owner of the deceased individual’s right to publicity.”

The right of publicity would have terminated at the death of the individual who would not have transferred it by contract, license, gift, trust or by will, and if he had no heirs who could have inherited it under the laws of intestate succession.

Such rights would not have “render[d] invalid or unenforceable any contract entered into by a deceased individual during his or her lifetime by which the deceased individual assigned the rights, in whole or in part, to use his or her right of publicity.”

First Amendment defense

The bill would have provided a First Amendment defense. It would not have been necessary to secure the consent of the individual for using her right of publicity if such right would have been

used in connection with news, public affairs or sports broadcast, including the promotion of and advertising for a public affairs or sports broadcast, an account of public interest or a political campaign;a play, book, magazine, newspaper, musical composition, visual work, work of art, audiovisual work, radio or television program if it is fictional or nonfictional entertainment, or a dramatic, literary or musical work;  a work of political, public interest or newsworthy value including a comment, criticism, parody, satire or a transformative creation of a work of authorship; or an advertisement or commercial announcement for any [news, public affairs or sports broadcast, including the promotion of and advertising for a public affairs or sports broadcast, an account of public interest or a political campaign].

These exceptions are quite broad, and so, while the bill expanded the scope of the New York right of publicity, it also expanded the scope of the exceptions to this right.

The Authors Guild expressed its “grave concerns” about the bill, in a letter to three members of the New York legislature, as it “has the potential to cause great harm to our society’s knowledge-base and to stifle speech, as it would make it difficult for authors to write without restraint about public figures, who may threaten to file a right of publicity suit to stifle speech critical of them.

The law is not clear enough

A work thus exempted “that includes a commercial use and replicates the professional performance or activities rendered by an individual” would not have been exempt “where the replication is inextricably intertwined with the right of publicity of such individual,”subject, however, to the First Amendment and section eight of article one of the New York state constitution protecting freedom of expression. What does”inextricably intertwined” mean? Your guess is as good as mine…

Owners or employees of any medium used for advertising which would have published or disseminated an individual’s right of publicity would not have been liable unless established that “they knew the unauthorized use was prohibited by [the New York statutory right of publicity]. Would owners and employees only benefited from this immunity if they did not know the use to be unauthorized and that such unauthorized use was prohibited by law, or would the knowledge that the use was unauthorized been enough? It is difficult to say.

Let’s hope that the bill will be written again in a more precise way, and that its scope will be narrowed. We’ll keep you posted.

Image of Japanese building courtesy of Flickr user antjeverena under a CC BY-SA 2.0 license.

Image of eggs is courtesy of Flickr user Karen Roe under a  CC BY 2.0 license.

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France’s Highest Court Rules in Favor of Freedom of Expression of Director over Heirs’Droit Moral

Readers of this blog may remember that the Paris Court of Appeals found in October 2015 that the staging of the opera Le Dialogue des Carmélites by Dmitry Chernyakov for the Munich Opera in 2010 violated the moral rights of composer and librettist Francis Poulenc, which adapted the eponymous theatrical play by Georges Bernanos.

Le Dialogue des Carmélites tells the story of French aristocrat Blanche de la Force who decides to enter the Carmelite Convent, possibly to be sheltered from life, as she is fearful and shy. The French Revolution upset her world and the Carmelites must leave the convent. Blanche leaves the congregation to return to her family. When the Carmelites are arrested and sentenced to death by the revolutionary tribunal, Blanche returns to them as they are each climbing the steps to the guillotine, and she is the last one to have her head cut off.

Dmitry Chernyakov had not modified the score or the dialogue. However, his interpretation did not take place during the French revolution, but in contemporary time. In the last scene, the Carmelites are locked up in a shed full of explosives. Blanche appears on the scene and pulls them all out to safety, one by one. She then comes back to the shed which explodes, killing her, an apparent suicide.

The heirs of both Francis Poulenc and Georges Bernanos had sued Dmitry Chernyakov and the Munich Opera, claiming a violation of their moral rights, which are which are perpetual and transferable upon death under Article L. 121-1 of the French intellectual property code. The Paris Court of Appeals had ruled in their favor, finding that the scenography profoundly modified the final scene and distorted its spirit. The DVD of the play could no longer be sold.

The director and the Opera took the case to the Cour de cassation, France’s highest civil court. The heirs argued in defense that if a certain freedom can be recognized for the director to performance his work, this freedom is limited by the moral right of the author to the respect of the integrity and spirit of his work, which must not be denatured.”

But the Cour de cassation just ‘broke’ this holding on June 22. The Court reasoned that the Paris Court of appeals had noted that “the contested staging did not modify the dialogue, absent in this part of the preexisting work, nor the music, even going so far as to reproduce, along with the religious songs, the sound of the guillotine which rhythms, in the Francis Poulenc opera,. Each death, and that the end of the story, as staged and described by Dmitry Chernyakov, respected the themes of hope, of martyrdom, of grace and transfer of grace and of the communion of saints dear to the authors of the original work, [and that therefore] the Court of appeals did not draw the legal consequences of its own findings and violated [article L. 113-4 of the French intellectual property code.]”

Article L.113-4 of the French intellectual property code states that “[t]he composite work is the property of the author who created it, subject to the rights of the author of the pre-existing work.”

In our case, the staging of the opera is a composite work, subject indeed to the rights of the authors of the pre-existing work, the opera. Such rights include moral rights. But the staging, as a composite work, is also a work on its own, protected by article L. 113-4. Since it does not infringe on the rights of the authors of the original work, their rights had not been violated.

This ruling is not surprising, as the Cour de cassation had held on May 15, 2015, that a Court of Appeals must explain “in a concrete manner how searching for the right balance between the rights [of the author of the original work and the rights of the author of the composite work] justified the sentence it had pronounced.”

The Cour de cassation also cited Article 10 § 2, of the Convention for the Protection of Human Rights and Fundamental Freedoms. Protecting freedom of expression, to find that the Court of appeals erred in forbidding the sale of the DVDs of the opera and its broadcast, because it should have examined “what in the search for a fair balance between the director’s freedom of creation and the protection of the moral rights of the composer and the author of the libretto justified the prohibition order it ordered.”

The Versailles Court of Appeals will not review the case again and will likely rule in favor of the director, and thus preserve his freedom to create and to express himself. Moral rights are often viewed in the U.S. as a way to censor creativity, and the 2015 Paris Court of appeals ruling certainly provided grounds for this view.

This post originally appeared on The 1709 Blog. 

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Anti-Harassment Video Turned Appetizers Ad is Not False Endorsement

On 24 January 2017, Judge Abrams from the Southern District of New York (SDNY) granted a motion to dismiss from a video director who had been sued for violation of Section 43(a) of the Lanham Act by an actress featured in an anti-street-harassment video he had directed, and which he later licensed for use in an TGI Friday’s appetizers advertisement. The case is Roberts v. Bliss, No. 15-CV-10167.

Plaintiff had been hired to appear in “10 Hours Walking in NYC as a Woman,” (the video) which was filmed by hidden camera to show the amount of catcalling directed at women walking on the streets. The actress was filmed for 10 hours walking in the streets of Manhattan, while men commented on her appearance and asked for her phone number. The footage was edited to a 1.56 minute video, which ended with a message urging viewers to donate to a non-profit organization dedicated to fighting street harassment, which had commissioned the video.

The video was directed and produced by Defendant Rob Bliss. He posted the video on YouTube in October 2014, and it went viral within 24 hours, receiving 10 million views in the first 24 hours of its posting. It has now been seen some 44 million times. After the video went viral, Bliss used it on his professional website to advertise his services. In February 2015, he licensed the video to a Colorado advertising agency, which used it to create two ads for TGI Friday’s, a fifteen-second ad and a thirty-second ad (the ad).

The ad starts with a black screen with the text, ”Nobody likes a catcaller,” and then shows clips of the video, with oversized pictures of new TGI Friday’s appetizers entirely covering Plaintiff’s body. This gives the impression that men on the street are  expressing their admiration for mozzarella sticks or potato skins. The ad ends with another black screen which reads: “But who can blame someone for #AppCalling?”

Plaintiff sued Bliss, his company, and the non-profit which had originally commissioned the ad, claiming that the ad misleadingly implied that she had endorsed the ad and the appetizers, in violation of Section 43(a) of the Lanham Act, which forbids false endorsements. She also claimed that her right of publicity under New York law had been violated. Claims against the non-profit were later dropped.

The Section 43(a) false endorsement claim fails

Plaintiff claimed that she had not licensed her identity or persona to be used in the ads and would not have done so if offered to license it. She claimed that the ad violates Section 43(a) of the Lanham Act, as it “depicted [her] persona and conveyed the false impression to a substantial group of viewers… that she had participated in, authorized or endorsed the [ad]” (Complaint, p. 12-13).

While right of publicity laws generally forbid using a person’s likeness for commercial purposes, the Lanham Act, which prohibits the unauthorized use of personal identity in endorsements or advertising, may also be used to that effect. Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) prohibits:

“us[ing] in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which… is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or… in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.”

Judge Abrams cited Burck v. Mars, Inc., a 2008 SDNY case, which enumerated the elements of a false endorsement claim under the Lanham Act, which require that “the defendant, (1) in commerce, (2) made a false or misleading representation of fact (3) in connection with goods or services (4) that is likely to cause consumer confusion as to the origin, sponsorship, or approval of the goods or services”.

The ad did not use Plaintiff’s persona

Plaintiff did not claim that her name had been used, but instead her “persona,” which indeed could fall within the scope of Section 43(a), as its broad terms may indeed protect persona.

Judge Abrams examined what exactly is a “persona” and noted that it is defined by the Oxford English Dictionary as “the aspect of a person’s character that is displayed to or perceived by others.” He also quoted two 1992 Ninth Circuit cases recognizing persona. In Waits v. Frito Lay, a case about the unauthorized imitation of Tom Waits‘ voice, the court held that an artist’s distinctive voice and style was part of his persona. In White v. Samsung Elecs. Am. Inc., the court recognized that Vanna White had a right to her individual style and stance within the context of the set of Wheel of Fortune, where she had become famous; therefore, an ad could not use a robot in a blonde wig and pink dress on a set resembling Wheel of Fortune.

In this case, Judge Abrams was not convinced by Plaintiff’s claim “because neither she, nor any representation of her, her image, or her persona, appear in the TGI Friday’s advertisement, and the ad contains no false or misleading statement suggesting that she endorsed TGI Friday’s or its appetizers.” He noted further that “the superimposed renderings of appetizers cover [Plaintiff’s] entire body.”

Judge Abrams also noted that Plaintiff could not claim that she is so associated with her performance that the ad falsely implies that she endorsed the appetizers, because the Second Circuit held in Oliveira v. Frito Lays, Inc. that a signature performance, which is one in which a “widespread audience associates with the performing artist,” cannot be claimed as a trademark. In Oliveira, the Court found that Astrud Gilberto, the singer who first sang The Girl From Ipanema, could not claim her performance as a trademark and thus claim her rights had been infringed by the use of her performance in an ad without her permission. Judge Abrams noted that TGI Friday’s had purchased a license for the video, just as Frito Lays had purchased a license to use The Girl from Ipanema in the potato chip ad. Judge Abrams concluded that the ad did not falsely imply that Plaintiff endorsed the products, noting again that Plaintiff is not seen at all in the ads.

There is no likelihood of confusion as to Plaintiff’s sponsorship because the ad is parody

Judge Abrams also found that Plaintiff did not prove that consumers were likely to be confused as to her sponsorship of the ad. He quoted Burck, where the SDNY found that if a trademark is parodied, it may be enough to result in no confusion under the statutory likelihood of confusion analysis.” Thus, if there is a parody, there is probably not consumer confusion. This had also been noted in January 2016 by Judge Furman of the SDNY in the Louis Vuitton v. My Other Bag case, which was recently affirmed by the Second Circuit (see here for a former discussion of the case in the TTLF newsletter). In that case, Judge Furman discussed the parody of a trademarks at length, and observed that “a parody clearly indicates to the ordinary observer that the defendant is not connected in any way with the owner of the… trademark.” In Bliss, Judge Abrams found the ad to be “a clear parody” of the video, which “in no way suggests that [Plaintiff] was championing the product used to mock the video for its own commercial benefit.”

The right of publicity claim was not addressed by the federal court

Since Judge Abrams dismissed the federal law claim which had justified federal jurisdiction, he declined to review the New York right of publicity claim.

New York’s right of publicity law is codified in New York Civil Rights Law, Section 50-5, and protects the right to privacy of a person if a “person, firm or corporation” uses her “name, portrait or picture” for “advertising purposes, or for the purposes of trade… without having first obtained the written consent of such person”.

Would Plaintiff be more successful in her claim that her persona had been used without her permission in a New York court? As noted in a previous TTLF newsletter, some state’s right of publicity laws protect personas, such as the Alabama Right of Publicity Act which protects the right of publicity of individuals “in any Indicia of Identity,” and thus extend its protection to persona. This is not the case in New York.

Actress Lindsay Lohan recently argued that the protection of New York’s right of publicity includes her persona, which she claimed is composed of various elements such as a bikini, shoulder-length blonde hair, jewelry, a cell phone, sunglasses, a loose white top, and her signature ‘peace sign’ pose. he Appellate division of the New York Supreme Court dismissed her claim on 1 September 2016, because New York law only protects against unauthorized use of a person’ name, portrait, or picture— not a persona. However, in February 2017 the New York Court of Appeals accepted review of this case, and so may affirm or modify the narrow scope of the New York’s right of publicity.

Plaintiff has appealed her federal case and is likely to pursue her New York right of publicity case. Regardless, this case highlights the dangers of performing without a written contract. Plaintiff alleged in her complaint that she agreed to participate in the project without being compensated because the video had been presented to her as a public service announcement against street harassment. She received death and rape threats after appearing in the original video. This case brings in mind the Garcia v. Google case (discussed in a previous TTLF newsletter here) where an actress unsuccessfully claimed copyright in her performance. There are no neighboring rights provided to performers in U.S. law, unlike, say, French law, which grants performers a droit voisin,, a sort of property right over their interpretation of the work protected by copyright . In a statement, Plaintiff wrote that “the rights of all actors and other creative artists are increasingly threatened by those who profit commercially from their content without paying for it.” Should U.S. law give performers a neighboring right?

This post has been first published on the TTLF Newsletter on Transatlantic Antitrust and IPR Developments published by the Stanford-Vienna Transatlantic Technology Law Forum.

 

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Is Adidas too Agressive At Enforcing its Trademarks?

Adidas owns multiple trademark registrations in the European Union and the U.S. for its famous three stripe design, and it fiercely protects them. It has filed, and won, several trademark infringement suits, and regularly sends cease-and-desist letters asking brands to stop selling shoes or clothes bearing stripes.

In February 2017, Adidas filed a notice of opposition with the U.S. Patent and Trademark Office Trademark Trial and Appeal Board (TTAB) to the registration of a mark that Tesla Motors was seeking to register for articles of clothing. The mark would have consisted of “three equal length horizontal stylized lines in the manner of a stylized number 3.” The trademark has since been abandoned after an inter-partes decision by the TTAB.

On 17 February 2017, Adidas also filed a trademark infringement and dilution suit against competitor Puma North America Inc. in the district court of Oregon. Adidas claimed that Puma’s new model of soccer cleats, which bear four diagonal stripes on each side, infringes on the Adidas trademark as it is likely to cause consumer confusion as to the source of the footwear. Adidas voluntarily dismissed the case on 28 February  2017, likely following successful negotiations with Puma.

On 14 February 2017, the Barcelona Football Club abandoned its application to register a mark in class 28, for sporting articles, following a notice of opposition filed by Adidas on 31 October 2016, and an inter-partes decision by the TTAB. The abandoned mark consisted of “a square containing seven vertical stripes. The 1st, 3rd, 5th and 7th stripes from the left are blue, and the remaining three stripes are garnet.”

On 17 March 2017, Adidas filed a trademark infringement and dilution suit in the Eastern District of North Carolina, against fashion company Juicy Couture, which came to fame some 15 years ago for creating a velour tracksuit. Adidas claimed that some jackets and pants, bearing stripes on their sleeves and sides, infringe several of its trademarks.

Adidas has won or settled all of the trademark infringement cases it has filed. Will the streak ever end?

The scope of the three-stripe trademark

What exactly do the Adidas trademarks protect? Are all three stripes claimed by Adidas under the trademark? Are all stripes on shoes and clothing, regardless of the number of stripes, claimed by Adidas?

Adidas owns several federal trademark registrations in the U.S. for a mark consisting “of three parallel stripes applied to footwear,  the stripes are positioned on the footwear upper in the area between the laces and the sole,” (see here, here, or here). Adidas also owns trademarks for clothing bearing the three stripes (see here) and even for verbal trademarks using the term “3 stripes,” such as the trademark “THE BRAND WITH THE 3 STRIPES.” Does that mean that Adidas has a monopoly for just about every trademark featuring three stripes, every trademark featuring two or four stripes, or even for clothing featuring any number of stripes?

The February 2017 complaint against Puma stated that Adidas has been using the three-stripe trademark on shoes since 1952 and on apparel since 1967. While easily recognizable, Adidas’s three-stripe trademark is also simple: three stripes, often shown diagonally on the sides of shoes, on the sleeves of a training jacket, or the sides of training pants, shorts, or shirts. The three stripes are all of the same width when seen together, but this width varies from trademark to trademark. The distance between each stripe also varies.

In the USPTO Design Search Code Manual, category 26 is for “geometric figures and solids.” 26.17 is for “lines, bands, bars, chevrons and angles” and 26.17.01 is for “straight line(s), band(s) or bar(s).” 26.17.05 is the code for “horizontal line(s), band(s) or bar(s).”

The design search codes for the trademark which Tesla sought to register were 26.17.01 and 26.17. A recent search in the TESS database for a mark with a 26.17. 01 code yielded 89,266 records and a search for marks with the 26.17.05 code yielded 81,820 records. Amongst the 26.17.05 results, 14 were filed by Adidas.

The mark which Tesla sought to register was described in the application as consisting of “three equal length horizontal stylized lines in the manner of a stylized number 3.” Yet the stripes were not similar to Adidas stripes, which are cut in a neat angle. Tesla’s stripes were cut on the side in a soft curve, resembling a Japanese wood beam or roof. The Barcelona Football Club was trying to register as a trademark the stripes which are seen on its own logo, which is itself a registered trademark! Indeed, many sports teams around the world sport stripes on their uniforms. A stripe is a stripe is a stripe. Yet Adidas opposed these two trademark registrations.

Is Adidas going too far?

This is not the first time that Adidas sued a company over the use of stripes on shoes or clothing, even if more or less than three stripes are featured. Adidas sued several European retailers in the late nineties over the use of two stripes on the side of sports clothes, which eventually led to the European Court of Justice ruling in 2008, in Adidas AG and Others v. Marca Mode CV and Others, that Adidas’ competitors could not “be authorized to infringe the three-stripe logo registered by Adidas by placing on the sports and leisure garments marketed by them stripe motifs which are so similar to that registered by Adidas that there is a likelihood of confusion in the mind of the public” (at 32).

While there may be a need for signs which do not have a distinctive character, such as stripes, to be available for competitors, this need “cannot be taken into account in the assessment of the scope of the exclusive rights of the proprietor of a trade mark” (ruling of the Court). The European Court of Justice thus chose to protect the public against any likelihood of confusion.

U.S. fashion manufacturers also encounter legal difficulties when using stripes on garments, and their frustration is mounting. On 3 March 2017, fashion retailer and manufacturer Forever 21 filed a complaint against Adidas, asking the Central District Court of California for a declaratory judgment of non-infringement of trademark. Forever 21 claims that Adidas is now “essentially asserting that no item of clothing can have any number of stripes in any location without infringing Adidas trademarks.” Forever 21 is “[t]ired of operating with a cloud over its head with regard to its right to design and sell clothing items bearing ornamental/decorative stripes” and “has decided that enough is enough… This matter is ripe for a declaratory judgment.” However, Forever 21 voluntarily dismissed the case on 13 March 2017.

Stripes are never out of fashion, and fashion designers frequently use them on the side of pants or jackets. Is this infringement? Forever 21 had claimed that “Adidas should not be allowed to claim that Adidas, alone, has a monopoly on striped clothing.” The retailer filed the suit after receiving yet another cease and desist letter sent by Adidas, this time asking Forever 21 to stop selling clothes bearing four stripes, including a sports bra, tee shirts and pants. Forever 21 claimed that “[a]ny use of stripes on clothing sold by Forever 21 is ornamental, decorative, and aesthetically functional.”

Adidas had sent a similar letter to Forever 21 in June 2015, which claimed that a sweat shirt featuring Snoopy, with stripes on its cuffs, bottom and collar, was infringing. However, varsity jackets, or letterman jackets, traditionally sport stripes in similar places, and Forever 21 indeed described its Snoopy shirt as featuring “generic varsity-style stripe pattern.” Is Adidas too aggressive in enforcing its mark?

A need to police the mark

These cease and desist letters illustrate what trademark owner must do to avoid losing their rights through failure to control use. Section 45 of the Trademark Act states that a mark is abandoned when “any course of conduct of the owner, including acts of omission as well as commission, causes the mark to… lose its significance as a mark.” This includes failing to adequately police the mark against third-party use. Also, the three-stripe mark is famous, thus making trademark dilution another concern for Adidas. In fact, even just the appearance of dilution is a concern, since trademark owners only need to prove a likelihood of dilution, not actual dilution, after the enactment of the Trademark Dilution Revision Act of 2006. Adidas does not want its three stripes to strike out. But is it the general public which ends up losing?

This post has been first published on the TTLF Newsletter on Transatlantic Antitrust and IPR Developments published by the Stanford-Vienna Transatlantic Technology Law Forum

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CJEU: Comparative Advertising Lawful Only if it Compares Goods from Stores of Similar Sizes

On 8 February 2017, the Court of Justice of the European Union (CJEU) held that an advertisement   comparing prices of goods sold in shops of different sizes and formats is liable to be  unlawful as the advertisement does not clearly inform consumers of these differences in sthe stores’ sizes and formats. The case is Carrefour Hypermarchés SAS v. ITM Alimentaire International SASU, C-562/15.

ITM is responsible for the strategy and commercial policy Intermarché, the retail chain, which owns supermarkets and hypermarkets, the largest of stores in the EU (Intermarché). Carrefour Hypermarché is part of the Carrefour group, which owns supermarkets, hypermarkets, and small stores in cities (Carrefour).

Carrefour launched a comparative television advertising campaign in 2012 which compared the prices of 500 leading brand products sold in its hypermarkets with the prices of these goods in competitors’ stores, and offered to reimburse consumers twice the price difference if they found cheaper prices for these goods than at Carrefour stores.

However, Carrefour compared its hypermarkets prices with Intermarché’s supermarket prices, without informing the public of the difference in the stores’ sizes and format. which prices were being compared in the advertisement. This information was only published on Carrefour’s website, and in small print.

Intermarché filed suit against Carrefour in October 2013, asking the Paris Commercial Court to enjoin Carrefour from disseminating the ad. The Court awarded Intermarché 800,000 euros in damages. Carrefour appealed to the Paris Court of Appeals, and also requested that the issue be referred to the CJEU for a preliminary ruling.

The European Union law and the French law of comparative advertising

Article 6 of Directive 2005/29 defines a misleading commercial action as one which “contains false information and is therefore untruthful or in any way… deceives or is likely to deceive the average consumer… or is likely to cause him to take a transactional decision that he would not have taken otherwise.” Article 2(b) of Directive 2006/114/EC defines “misleading advertising” as “any advertising which in any way, including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behavior or which, for those reasons injures or is likely to injure a competitor.”

Article 4 of Directive 2006/114/EC allows comparative advertising if it is not misleading, Article 4(a), and if it “objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price,” Article 4(c). Similarly, French law authorizes comparative advertising if it is not misleading or likely to deceive, Article L. 121-8 of the Consumer Code, in force when the suit against Carrefour was filed.[1] Both articles recite the termsof Directive 2006/114/EC.

The Paris Commercial Court found that Carrefour advertising did not comply with Article L. 121-8 of the Consumer Code. The Paris Court of Appeals asked the CJEU if price comparison is allowed by Article 4 of Directive 2006/114/EC only if the goods are sold in stores with similar formats and sizes. It also asked the CJEU if comparing prices of stores with different sizes and formats is “material information” within the meaning of Article 7(1) of Directive 2005/29, which states that a commercial practice is “misleading” if it omits “material information that the average consumer needs” to make an informed transactional decision. The Paris Court of Appeals also asked the CJEU to explain to what degree and via which medium this information must be disseminated to the consumer.

Is comparative advertising only legal if it compares prices of products sold in shops of similar sizes?

The CJEU synthesized the questions of the Paris Court of Appeals as: whether Article 4(a) and 4(c) must be interpreted as saying that an advertisement comparing the prices of products sold in shops of different sizes is unlawful?

The CJEU noted that Article 4 of Directive 2006/114 does not require that the shops compared be of similar formats or sizes. However, comparative advertising must not undermine fair competition or the interest of consumers (at 22). This would be the case if the comparative advertisement is misleading.

The difference in size or format of the shop may distort the objectivity of the price comparison

Article 4(c) of Directive 2006/114 requires the comparison be objective. However, as noted by the Court, “in certain circumstances the difference in size or format of the shops in which the prizes being compared by the advertiser have been identifiedmay distort the objectivity of the comparison” (at 26). Indeed, Attorney General Saugmandsgaard Øe noted in his October 19, 2016 Opinion, “that generally… the prices of consumer products are likely to vary according to the format and size of the shop” (Opinion at 43). Such “asymmetric comparison” of prices could “artificially creat[e] or increase[e] any difference between the advertiser’s and the competitor’s prices, depending on the selection of the shops for the comparison” (Opinion at 57, and CJEU at 27).

While Directive 2005/29 does not define what the “material information” cannot be omitted from the ad, the CJEU found that material information is the information that an average consumer would need to make an informed transactional decision (at 30).

If the prices compared in the ad are those of shops of different sizes and formats, it is likely to deceive the consumer, if these shops “are part of retail chains each of which includes a range of shops having different sizes or formats” (CJEU ruling, paragraph 1). Indeed, the customer may believe that the advertised price difference applies to all the shops in the advertiser’s retail chain, and such advertising is thus misleading (at 33 and 34). As this information is “necessary” for the consumer to make an informed decision on where to shop, it is a “material information” within the meaning of Article 7 of Directive 2005/29 (at 35).

The information of the difference in shops ‘sizes and format must be clear

Such advertising is misleading unless the customer is informed that the prices compared concerns shops of different sizes and formats (at 36). Such information must “clearly” provided, in the advertisement itself (at 38).

It is the duty of the national courts to assert, case by case, whether a particular advertising is misleading (at 31) and thus the referring court, the Paris Court of Appeals, will have to ascertain, in the light of this case, if the Carrefour comparative advertisement is misleading (CJEU ruling, paragraph 2). It is very likely that it will rule that such comparative advertising is misleading, as Carrefour compared prices in its hypermarkets to prices with Intermarché’s supermarkets, and such shops. While both shops are part of a retail chain, they are different in size and format.

[1] Article L. 121-8 of the Consumer Code has since been  abrogated and  replaced,  without any changes, by  Article L. 122-1 of the Consumer Code.

On 8 February 2017, the Court of Justice of the European Union (CJEU) held that an advertisement   comparing prices of goods sold in shops of different sizes and formats is liable to be  unlawful as the advertisement does not clearly inform consumers of these differences in sthe stores’ sizes and formats. The case is Carrefour Hypermarchés SAS v. ITM Alimentaire International SASU, C-562/15.

ITM is responsible for the strategy and commercial policy Intermarché, the retail chain, which owns supermarkets and hypermarkets, the largest of stores in the EU (Intermarché). Carrefour Hypermarché is part of the Carrefour group, which owns supermarkets, hypermarkets, and small stores in cities (Carrefour).

Carrefour launched a comparative television advertising campaign in 2012 which compared the prices of 500 leading brand products sold in its hypermarkets with the prices of these goods in competitors’ stores, and offered to reimburse consumers twice the price difference if they found cheaper prices for these goods than at Carrefour stores.

However, Carrefour compared its hypermarkets prices with Intermarché’s supermarket prices, without informing the public of the difference in the stores’ sizes and format. which prices were being compared in the advertisement. This information was only published on Carrefour’s website, and in small print.

Intermarché filed suit against Carrefour in October 2013, asking the Paris Commercial Court to enjoin Carrefour from disseminating the ad. The Court awarded Intermarché 800,000 euros in damages. Carrefour appealed to the Paris Court of Appeals, and also requested that the issue be referred to the CJEU for a preliminary ruling.

The European Union law and the French law of comparative advertising

Article 6 of Directive 2005/29 defines a misleading commercial action as one which “contains false information and is therefore untruthful or in any way… deceives or is likely to deceive the average consumer… or is likely to cause him to take a transactional decision that he would not have taken otherwise.” Article 2(b) of Directive 2006/114/EC defines “misleading advertising” as “any advertising which in any way, including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behavior or which, for those reasons injures or is likely to injure a competitor.”

Article 4 of Directive 2006/114/EC allows comparative advertising if it is not misleading, Article 4(a), and if it “objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price,” Article 4(c). Similarly, French law authorizes comparative advertising if it is not misleading or likely to deceive, Article L. 121-8 of the Consumer Code, in force when the suit against Carrefour was filed.[1] Both articles recite the termsof Directive 2006/114/EC.

The Paris Commercial Court found that Carrefour advertising did not comply with Article L. 121-8 of the Consumer Code. The Paris Court of Appeals asked the CJEU if price comparison is allowed by Article 4 of Directive 2006/114/EC only if the goods are sold in stores with similar formats and sizes. It also asked the CJEU if comparing prices of stores with different sizes and formats is “material information” within the meaning of Article 7(1) of Directive 2005/29, which states that a commercial practice is “misleading” if it omits “material information that the average consumer needs” to make an informed transactional decision. The Paris Court of Appeals also asked the CJEU to explain to what degree and via which medium this information must be disseminated to the consumer.

Is comparative advertising only legal if it compares prices of products sold in shops of similar sizes?

The CJEU synthesized the questions of the Paris Court of Appeals as: whether Article 4(a) and 4(c) must be interpreted as saying that an advertisement comparing the prices of products sold in shops of different sizes is unlawful?

The CJEU noted that Article 4 of Directive 2006/114 does not require that the shops compared be of similar formats or sizes. However, comparative advertising must not undermine fair competition or the interest of consumers (at 22). This would be the case if the comparative advertisement is misleading.

The difference in size or format of the shop may distort the objectivity of the price comparison

Article 4(c) of Directive 2006/114 requires the comparison be objective. However, as noted by the Court, “in certain circumstances the difference in size or format of the shops in which the prizes being compared by the advertiser have been identifiedmay distort the objectivity of the comparison” (at 26). Indeed, Attorney General Saugmandsgaard Øe noted in his October 19, 2016 Opinion, “that generally… the prices of consumer products are likely to vary according to the format and size of the shop” (Opinion at 43). Such “asymmetric comparison” of prices could “artificially creat[e] or increase[e] any difference between the advertiser’s and the competitor’s prices, depending on the selection of the shops for the comparison” (Opinion at 57, and CJEU at 27).

While Directive 2005/29 does not define what the “material information” cannot be omitted from the ad, the CJEU found that material information is the information that an average consumer would need to make an informed transactional decision (at 30).

If the prices compared in the ad are those of shops of different sizes and formats, it is likely to deceive the consumer, if these shops “are part of retail chains each of which includes a range of shops having different sizes or formats” (CJEU ruling, paragraph 1). Indeed, the customer may believe that the advertised price difference applies to all the shops in the advertiser’s retail chain, and such advertising is thus misleading (at 33 and 34). As this information is “necessary” for the consumer to make an informed decision on where to shop, it is a “material information” within the meaning of Article 7 of Directive 2005/29 (at 35).

The information of the difference in shops ‘sizes and format must be clear

Such advertising is misleading unless the customer is informed that the prices compared concerns shops of different sizes and formats (at 36). Such information must “clearly” provided, in the advertisement itself (at 38).

It is the duty of the national courts to assert, case by case, whether a particular advertising is misleading (at 31) and thus the referring court, the Paris Court of Appeals, will have to ascertain, in the light of this case, if the Carrefour comparative advertisement is misleading (CJEU ruling, paragraph 2). It is very likely that it will rule that such comparative advertising is misleading, as Carrefour compared prices in its hypermarkets to prices with Intermarché’s supermarkets, and such shops. While both shops are part of a retail chain, they are different in size and format.

[1] Article L. 121-8 of the Consumer Code has since been  abrogated and  replaced,  without any changes, by  Article L. 122-1 of the Consumer Code.

 

This post has been first published on the TTLF Newsletter on Transatlantic Antitrust and IPR Developments published by the Stanford-Vienna Transatlantic Technology Law Forum

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Paris Court of Appeals: Photograph of Jimi Hendrix is original and thus protected by French copyright

The Paris Court of appeals has just published a decision which should be of interest to photographers anxious to defend their rights in France.

The Paris civil lower court (Tribunal de Grande Instance) had found in May 2015 that a photograph of Jimi Hendrix taken in February 1967 by British photographer Gered Mankowitz was not protected by French copyright (droit d’auteur) because it was not an original work of art. The court reasoned that the photographer had not shown which elements of the work protected by copyright were an imprint of his personality (traduire sa personnalité).

The photograph at stake represents Jimi Hendrix, facing the photographer, eyes slightly closed, arms crossed in front of the body, exhaling cigarette smoke. It was chosen by a French e-cigarette company to be featured in its advertising campaign, inside its two stores and online, without seeking permission of the author or the owner of the copyright, Bowstir Ltd, the company to which Mr. Mankowitz had assigned his patrimonial rights to the photography. Both filed suit in France. Bowstir claimed copyright infringement and Mr. Mankowitz claimed droit moral infringement, but they lost because they had not been able to prove, according to the Paris lower court, that the photograph was original enough.

The Court was not convinced that the photographer had indeed explained “who is the author of the choices relating to the pose of the subject, his costume and his general attitude.” For the Tribunal de Grande Instance, there was “nothing to enable the judge and the defendants to understand whether these elements, which are essential criteria in appreciating the original characteristics being claimed, the framing, the black and white, the clear décor meant to highlight the subject, and the lighting which is banal for [such a portrait photograph], are the fruit of a reflection of the author of the photograph or of his subject, and whether the work bears the imprint of the personality of Mr. Gered Mankowitz or Jimi Hendrix.”

The Tribunal de Grande Instance had cited at length the European Court of Justice Eva Maria P. v. Standard Verlags GmbH case:

As stated in recital 17 in the preamble to Directive 93/98, an intellectual creation is an author’s own if it reflects the author’s personality. That is the case if the author was able to express his creative abilities in the production of the work by making free and creative choices… As regards a portrait photograph, the photographer can make free and creative choices in several ways and at various points in its production. In the preparation phase, the photographer can choose the background, the subject’s pose and the lighting. When taking a portrait photograph, he can choose the framing, the angle of view and the atmosphere created. Finally, when selecting the snapshot, the photographer may choose from a variety of developing techniques the one he wishes to adopt or, where appropriate, use computer software. By making those various choices, the author of a portrait photograph can stamp the work created with his ‘personal touch’. Consequently, as regards a portrait photograph, the freedom available to the author to exercise his creative abilities will not necessarily be minor or even non-existent.”
On June 13, 2017, the Paris Court of Appeals ruled in favor of Mr. Mankowitz, finding that the Jimi Hendrix photograph was indeed protected by copyright.

The Paris Court of Appeals did not spend much time explaining why the photograph is indeed original and thus protected by the droit d’auteur.
“…the appellants argue that it was Mr. Mankowitz who organized the session at which the photograph in question was taken… who guided and directed Jimi Hendrix during the shooting, and asked him to take the pose reproduced in the photograph in question; they indicate that Mr. Mankowitz chose to take the photograph in black and white in order to give him more attitude and give him the image of a serious musician and that the photographer opted for a Hasselblad camera 500c with a 50mm Distagon lens in order to bring a wide-angle touch to the portrait without creating any distortion; they also state that Mr. Mankowitz chose the decor, the lighting, the angle of view and the frame…
That these elements, added to the fact, uncontested and established by evidence, that Mr. Mankowitz, an internationally recognized photographer, notably for having been the photographer of the Rolling Stones, whose photographs enjoy a high reputation, establish that the photograph at stake is the result of free and creative choices made by the photographer which reflect the expression of his personality.”

Take – away: photographers defending their copyright in France should be ready to provide the court with a description of their creative process.

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R.I.P. Conceptual Separability Test

The US Supreme Court held on March 22, 2017 that a feature incorporated into the design of a useful article is eligible for copyright protection “if, when identified and imagined apart from the useful article, it would qualify as a pictorial, graphic, or sculptural work either on its own or when fixed in some other tangible medium.” The case is Star Athletica LLC v .Varsity Brands. Justice Thomas wrote the opinion of the Supreme Court.

Conceptual Separability is Much Safer

Readers of this blog may remember that this case is about whether cheerleading uniforms can be protected by copyright. Both parties are creating and selling cheerleading uniforms. Varsity Brands has registered some 200 copyrights for two-dimensional designs appearing on the surface of their uniforms and other garments. It sued Star Athletica for copyright infringement, claiming that its competitor had copied five of its designs protected by copyright. The Western District Court of Tennessee granted summary judgment to Star Athletica, reasoning the designs could not be protectable by copyright, as they could not be separated from the utilitarian function of the uniforms. On appeal, the Sixth Circuit Court of Appeals reversed, finding Varsity’s designs to be copyrightable graphic works. The Supreme Court affirmed.

UniformUseful articles cannot be protected by copyright, but a pictorial, graphic, or sculptural work incorporated in the useful article can be protected if it is separable from the useful article. However, such design must be capable of being “identified separately from, and [must be] capable of existing independently of the utilitarian aspects of the article,” 17 U.S.C. § 101. The design can be physically separable or “conceptually separable” from its utilitarian aspect. Physical separability occurs if the feature seeking copyright protection can “be physically separated from the article by ordinary means while leaving the utilitarian aspects of the article completely intact,” Compendium §924.2(B). This is easily understandable, but conceptual separability, which applies if physical separability by ordinary means is not possible, is the stuff [bad] dreams [of IP attorneys] are made of. Or, at least, it was, as today’s opinion signals its demise.

The first part of the new test requires that the design seeking copyright protection must be able to be perceived as a two or three-dimensional work of art separate from the useful article. This was the case here. Justice Breyer dissented from the majority, reasoning that the designs on the cheerleading uniforms are not separable because if one would remove them from the uniforms and place them on another medium of expression, such as a canvas, it would create “pictures of cheerleader uniforms.” But Justice Thomas wrote that this does not prevent these deigns to be protected by copyright, because

“[j]ust as two-dimensional fine art corresponds to the shape of the canvas on which it is painted, two-dimensional applied art correlates to the contours of the article on which it is applied.  A fresco painted on a wall, ceiling panel, or dome would not lose copyright protection, for example, simply because it was designed to track the dimensions of the surface on which it was painted” (p. 11).

The second part of the new test requires that the design must be able to exist apart from the utilitarian aspect of the article, as its own pictorial, graphic, or sculptural work. If it can’t, then it is one of the useful article’s utilitarian aspects. Thus, the design itselfcannot be itself a useful article (p. 7).

This interpretation is consistent with Mazer v. Stein, a 1954 Supreme Court case studied by all U.S. copyright students. Justice Thomas noted that two of its holdings are relevant in our case (p. 9).  The Court held in 1954 that a work of art which serves a useful purpose can be protected by copyright. In the case of Mazer v. Stein, it as was statue which served as a lamp base. The Court also held in 1954 that a work of art is copyrightable even if it was first created as a useful article. Justice Thomas specified that, in our case, the Court interpreted the Copyright Act in a way which is consistent with Mazer v. Stein as today’s opinion “would afford copyright protection to the statuette in Mazer regardless of whether it was first created as a standalone sculptural work or as the base of the lamp.”

R.I.P. conceptual separability test. Justice Thomas explains it is no longer needed, as “[c]onceptual separability applies if the feature physically could not be removed from the useful article… Because separability does not require the underlying useful article to remain, the physical-conceptual distinction is unnecessary” (p.15).

Justice Thomas clarified the scope of the opinion as such:

To be clear, the only feature of the cheerleading uniform eligible for a copyright in this case is the two-dimensional work of art fixed in the tangible medium of the uniform fabric. Even if respondents ultimately succeed in establishing a valid copyright in the surface decorations at issue here, respondents have no right to prohibit any person from manufacturing a cheerleading uniform of identical shape, cut, and dimensions to the ones on which the decorations in this case appear” (p. 12).

But what makes a particular uniform feature of stripes and chevrons particular, is it because they are applied on the uniform, or because the uniform is cut in such a way and uses such contrasting colors  on which the designs are appearing?

Justice Ginsburg concurred, but she took the view that “[c]onsideration of [the separability] test is unwarranted because the designs at issue are not designs of useful articles. Instead, the designs are themselves copyrightable pictorial or graphic works reproduced on useful articles… [and may thus] gain copyright protection as such” (p. 23 and p. 24).

Should we cheer? Time will tell.

This post was first published on The 1709 Blog.

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After Many Twists and Turns, the CJEU held that the Rubik’s Cube Trademark is Invalid

The First Chamber of the Court of Justice of the European Union (CJEU) held on 10 November 2016, that the famous Rubik’s cube cannot be registered as a three-dimensional trademark because its shape performs the technical function of the goods, a three-dimensional puzzle. The case is Simba Toys GmbH & Co. KG v. EUIPO, C-30/15 P.

The validity of the Rubik’s cube trade mark was challenged by a competitor

British company Seven Towns Ltd., acting on behalf of Rubik’s Brand Ltd., filed in April 1996 an application for registration of a Community trade mark at the Office for Harmonisation in the Internal Market (OHIM), now named the European Union Intellectual Property Office (EUIPO), for a three-dimensional sign, the famous Rubik’s cube. The mark was registered in April 1999 and renewed in November 2006.

A few days later, competitor Simba Toys applied to have the trade mark declared invalid under Council Regulation 40/94, which has been repealed and was replaced by Council Regulation 207/2009. The CJEU considered the case to be still governed by Council Regulation 40/94. Articles 1 to 36 are the same in both Regulations, and so the case is relevant under current EU trademark law.
Article 7(1)(e)(ii) of Council Regulation 40/94 prevents registration as a trademark of a sign, such as the Rubik’s cube product, “which consists exclusively of… the shape of goods which is necessary to obtain a technical result.” The CJEU had held in the 2002 Koninklijke Philips Electronics NV v. Remington Consumer Products Ltd. that a sign consisting exclusively of the shape of a product cannot be registered as a trademark if the essential functional features of the shape are attributable only to a technical result (Philips § 79 and § 80).

Simba Toys argued that the Rubik’s cube mark should be declared invalid under the grounds [absolute ground for refusal] that the mark is the shape of the goods necessary to achieve a technical result. According to Simba, the Rubik’s cube black lines are attributable to technical functions of the three-dimensional puzzle.

The OHIM dismissed Simba’s application for a declaration of invalidity and the Second Board of Appeal of OHIM affirmed the dismissal in September 2009, reasoning that the shape of the trade mark does not result from the nature of the Rubik’s cube itself. On 25 November 2014, the General Court dismissed the action for annulment as unfounded. Simba appealed to the CJEU.

What are the essential characteristics of the Rubik’s cube trade mark?

The essential characteristics of three-dimensional signs are the most important elements of the signs, Lego Juris v. OHIM, C-48/09, § 68 and 69. They must be properly identified by the competent trademark registration authority, Lego Juris v. Ohim § 68, which must then determine whether the essential characteristics all perform the technical function of the goods (General Court § 41). The General Court identified the essential characteristics of the Rubik’s cube trademark is a “cubic grid structure,” that is the cube itself and the grid structure appearing on each of its surfaces (General Court § 45). Simba did not challenge this finding on appeal at the CJEU.

Do the essential characteristics of Rubik’s cube perform the technical function of the goods?

Under Article 4 of Regulation 40/94 and Regulation 207/2009, any sign capable of being represented graphically can be a trade mark, unless, under article 7(1)(e)(ii) of both Regulations, the sign consists exclusively of the shape of goods which is necessary to obtain a technical result.

Article 7(1) grounds for refusal to register a mark must be interpreted in light of the public interest underlying them. The public interest underlying Article 7(1)(e)(ii) is to prevent the use of trademark law to obtain a monopoly on technical solutions or the functional characteristics of a product (General Court § 32, citing Lego Juris v. OHIM, § 43). Advocate General Szpunar explained further in his Opinion that allowing such marks to be registered would give the registrant “an unfair competitive advantage” and thus trade mark law cannot be used “in order to perpetuate, indefinitely, exclusive rights relating to technical solutions” (AG Szpunar Opinion § 32 and § 34).

For the General Court, Article 7(1)(e)(ii) applies only if the essential characteristics of the mark perform the technical functions of the goods “and have been chosen to perform that function.” It does not apply if these characteristics are the result of that function (General Court § 53). Simba argued in front of the CJEU that the General Court erred in this interpretation of Article 7(1)(e)(ii).

Simba claimed that the black lines of the cube performed a technical function (General Court § 51). But the General Court found that an objective observer is not able to infer by looking at the graphic representation of the Rubik’s cube mark that the black lines are rotatable (General Court § 57). The General Court held that Simba’s “line of argument… [was] essentially based on knowledge of the rotating capability of the vertical and horizontal lattices of the Rubik’s cube. However, it [was] clear that that capability cannot result from the black lines in themselves or, more generally, from the grid structure which appears on each surface of the cube… but at most from [an invisible] mechanism internal to that cube” (General Court § 58). Therefore, the grid structure on each surface of the cube “d[id] not perform, or are not even suggestive of, any technical function” (General Court § 60). The General Court concluded that registering the Rubik’s cube shape did not create a monopoly on a technical solution and mechanical puzzles competitors could also incorporate movable or rotatable elements (General Court § 65).

But, for AG Szpunar, the General Court erred in its analysis as it should have taken into account the function of the Rubik’s cube, which is a three-dimensional puzzle consisting of movable elements. He noted that in both the Philips and the Lego Juris cases, the competent authorities had analyzed the shape of the goods using additional information other than the graphic representation (AG Szpunar Opinion § 86). While the competent authority does not have to concern itself with hidden characteristics, it must nevertheless analyze “the characteristics of the shape arising from the graphic representation from the point of view of the function of the goods concerned” (AG Szpunar Opinion § 88).

The CJEU followed its AG’s Opinion on this point and found that the General Court should have defined the technical function of the actual goods, namely, the three-dimensional puzzle, and it should have taken this into account when assessing the functionality of the essential characteristics of that sign (CJEU § 47). The General Court “interpreted the criteria for assessing Article 7(1)(e)(ii) . . . too narrowly”(CJEU § 51) and should have taken into account the technical function of the goods represented by the sign when examining the functionality of the essential characteristics of that sign (CJEU § 52). Failing to do so would have allowed the trademark owner to broaden the scope of trademark protection to cover any three dimensional puzzles with elements in the shape of a cube (CJEU § 52).

This case confirms, after Pi-Design AG v. Bodum, that the CJEU takes the view that the essential characteristics of a trade mark must not be assessed solely by the competent authority based on visually analyzing the mark as filed, but that the authority must also identify the essential characteristics of a sign, in addition to the graphic representation and any other descriptions filed at the time of the application for registration. This is necessary to protect the public interest underlying Article 7(1)(e)(ii), which is to ensure that economic operators cannot improperly appropriate for themselves a mark which incorporates a technical solution.

The image is courtesy of Flickr user Robin under a CC BY 2.0 license.

This article was first published on the TTLF Newsletter on Transatlantic Antitrust and IPR Developments published by the Stanford-Vienna Transatlantic Technology Law Forum

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Influencer Marketing and the law

I spoke last January about influencers marketing and the law at a Gemode conference in Paris.

From the Gemode site:

Many fashion companies use social networks for marketing and communication purposes, whether it is the official social media account of the company or the account of its main designer. Some companies also use social media for promotional and commercial purposes, sometimes tapping into the creativity of influencers 2.0, whose social network accounts are followed by thousands of users. Selfies published on social networks by private individuals are an abundant and inexpensive source of content. They can be used by fashion companies following a crowdsourcing model, where the public participates in the creation of a common project that is born from the confluence of this user generated content. A new model of e-commerce has been created, social commerce, where photographs of social media “friends” are used to recommend a particular purchase.

There are laws, on both sides of the Atlantic, regulating the use by fashion companies of personal images published on social networks of private individuals and influencers The publisher must ensure that the person represented in the photograph has consented to have his or her likeness used for promotional purposes, and also ensure the legality of the use of these images from the point of view of consumer law, intellectual property, personal data law, and the right to freedom of expression. #Selfieslaw.

This conference presented some of my research as a Fellow of the Stanford-Vienna Transatlantic Technology Law Forum.

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