Happy World IP Day

by | Apr 26, 2024 | Intellectual Property

Happy World IP Day!

April 26th marks the celebration of World Intellectual Property Day, a significant event since its inception in 2000. This observance serves to shed light on the profound impact of patents, copyrights, trademarks, trade secrets, and designs on our daily lives while honoring the ingenuity and contributions of creators and innovators worldwide.

Each year the World Intellectual Property Organization (WIPO) chooses a new theme. This year WIPO’s theme is “IP and SDGs: Building our common future with innovation and creativity.” This year’s theme underscores the crucial role of Intellectual Property (IP) in advancing Sustainable Development Goals (SDGs). SDGs are a set of 17 goals established as a global call to action, and address pressing issues such as poverty, health, education, inequality, economic growth, climate change, and environmental conservation; and they emphasize the interconnectedness of these challenges and the need for collaborative efforts on a global scale.

For businesses like ours, this theme holds particular significance, highlighting our role in driving sustainability initiatives forward. IP serves as a catalyst for innovation and creativity, essential elements in addressing the SDGs, which serve as a roadmap for a better future for people and the planet. As IP Attorneys at Oliver & Grimsley, LLC, we take pride in recognizing and celebrating these endeavors and are committed to partnering with others to realize these goals for generations to come.

Warm regards on World IP Day from Oliver & Grimsley

It’s time to celebrate World IP Day!

by | Apr 26, 2023 | Intellectual Property

It’s 2023’s World IP Day! World IP Day is celebrated on the 26th of April each year.  This day was established 23 years ago today by the World Intellectual Property Organization (WIPO) to bring awareness of what IP (Intellectual Property) is, to recognize how IP impacts our lives, to celebrate innovators, creators and entrepreneurs globally, and to encourage activities that promote innovations and creativity in our lives.  The term “Intellectual Property” generally encompasses patents, copyrights, trademarks, trade secrets and designs. Each year, a theme is chosen and this year’s global theme is “Women in IP: Accelerating Innovation and Creativity”.  In choosing this topic, WIPO celebrates the ‘can do’ attitude of women inventors, creators, and entrepreneurs around the world and their ground-breaking work.

 

Women are shaping the world with their creativity, drive, imagination, reliability, and hard work.  Women across the world have overcome hurdles and have succeeded and achieved their goals to bring their intellectual property to us all.  The number of woman innovators, creators and entrepreneurs is growing, and there are more and more women-owned businesses each day.  We proudly recognize and celebrate this progress and as IP attorneys, we work with women inventors, creators, and entrepreneurs in helping them with the guidance and knowledge to identify, build upon and protect their valuable IP. 

 

This year USPTO is hosting an event with many organizations including WIPO, INTA, AIPLA and the ABA-IPL Section just to name a few to celebrate the work of women around the world and in raising awareness about why it is so important to encourage more women to participate in the IP system.  A live stream to this event here: https://www.eventbrite.com/e/2023-world-ip-day-tickets-591525497687 .

 

Happy World IP Day from Oliver & Grimsley, LLC!

So You received a copyright infringement letter – now what?

by | Feb 7, 2023 | Copyrights, Intellectual Property, Internet, Technology and Privacy Law

You get home and in your mail is a letter, typically from a law firm – accusing you of infringing some obscure copyrighted image you posted on a blog, website or other online location – often one you posted many years before.  It asks for a large payment (at least to you) – often several thousand dollars – to remedy the past alleged infringement.  Many times the law firm sending the letter is a one trick pony – this is all they do – that is to say, they literally make money by threatening (and suing) small alleged infringers.  If the law firm is a real firm – that is to say, they do other things and are enforcing rights of a smaller client as an example, then you probably should take it more seriously.

These copyright holders are often referred to as “copyright trolls” – in reference to their modus operandi of putting copyrighted material on the web – often easy to download, with hidden or hard to find license terms, and then scouring the web and sending these letters, in the hopes that a number of recipients just pay up – because it’s too expensive to hire lawyers.  Done incorrectly by the troll . . . and they can go to jail.  However the trolls often have enough evidence that the claim appears facially valid – and coupled with the possibility of a lawsuit or losing, and the high cost of lawyers – probably a lot of people just pay.  What should you do?

One option of course is do nothing and ignore it . . . and while in many cases the copyright holder might never actually sue you – there is a risk that they do sue you – and often that suit might be in a remote court.  At that point it will probably cost a lot of money to defend it, or settle.  Copyright cases must be brought only in federal court.  So step 1 is to check PACER, and see how “litigious” the plaintiff is. If the plaintiff actually follows through and sues, it is obviously more risky to do nothing. We also recommend internet searching the plaintiff and the lawyer.  Often you may find others who have won, or otherwise successfully defended against them – or worse, you might discover they are “Prenda like” (see the link above) and then you would definitely consider rejecting their offer or reporting them to the authorities for extortion.

Step 2 is to investigate what you did, when you did it, and where you did it.  We have handled many of these cases. A common statement is something to the effect that “I hired a web developer that handled this” – and more rarely “they got the images and told me they were free.”  Just because something is posted on the internet does not make it free.  Just because you had a web developer do it for you does not exonerate you.  Even the free sites, like Pixabay, have license terms.  Some allow unrestricted commercial use, some do not, or require attribution.  If a third party did this, you should review your contract with the developer, and see if they represented that they would create an infringement free website. You might have an indemnification right – in which case you need to make a claim against the developer. If you personally did this, you should see if you can track back to where you copied the image from.  Some sites, particularly social media sites, have very permissive use rights for people on their platform – though often the original image is copied by another user from somewhere else and posted without permission of the owner of the copyright.  You also need to determine if you just linked to the content, or whether you actually copied it and reposted it.  In short, you need to determine if in fact you are responsible for the image or other content that is claimed to be an infringement.  If you copied the image and did not modify it, you need to review the meta data in the image.  Meta data, a portion of which is also referred to as copyright management information or CMI, can be attached to an image to note the author, where to obtain permission, the web site of where the image is available from, and other information. In most cases, it is a violation of US law to modify any CMI in an image.

Step 3 is, if you are a business, to review your insurance policies. In most cases copyright infringement is not within coverage.  However, infringements that are contained in advertising can be, and if you had special insurance, known as media liability1, the policy may cover it. Note that a business is not a formal construct – if you were operating as a sole proprietor and purchased insurance, you should check the policy. You may also have purchased “umbrella” personal coverage that might provide insurance coverage.

Step 4 is to determine  if in fact you are infringing, and if so, whether you have a defense.

In determining if you are infringing and if you might have a defense, some of the factors are:

  • How long ago did this occur?  Was it continuing?  If the initial act occurred more than 3 years ago and the infringement is not a continuing infringement, the statute of limitations may apply and bar the claim.
  • How was the image used – thumbnail? Embedded link (an image tag that references another server), full resolution or lesser resolution?  In some cases some uses of images like thumbnails are less likely to infringe than full resolution copies.
  • Did the image have a copyright notice on it? (please note, such notice could be contained in meta data/CMI and may not be visible)
  • Did you try and remove any CMI?
  • Was the image used in connection with a recent news event, relevant to that event, and associated with reporting on such event?
  • Was the image posted on social media and is that where it came from (some social media sites have broad licenses to re-use those images by other users – at least within those platforms)
  • Did the site generate any revenue of any kind (including 3rd party advertising?)
  • Was the image used in more than one location, in emails, text messages, or posted on other sites?  Each such use might be a separate infringement.
  • If the content is a video and the claim is related to an image in the video (and not the video itself), how long was the image viewable and how prominent was the image?
  • Did the copyright holder provide evidence of registration? A copyright holder in the US cannot sue in court without an actual registration certificate (although they can sue inside of the copyright office, and simultaneously file an application)
  • If evidence was provided, are there any defects in the registration?  Often, the registration is a “group registration” but in fact did not qualify – in which case the registration would be invalid. Group registrations are complex and often authors file them as group registrations but the images are not grouped correctly which can result in a defective registration.
  • Did the copyright holder typically license the image?  How (for example, alone, or solely in a group of other images)?  What was a typical license fee for the image/group?
  • Did you make any effort to try and license the image, investigate etc? Did you get legal advice/clearance?

Some notes about common misperceptions.  The first is that many people immediately think they have a fair use right to use the content. Fair use is a somewhat limited concept in most cases outside of real news reporting.  Every piece of content is not news.  For example, where you ate today and what the food looked like is not news in the typical fair use sense.  If you grab an image that is copyrighted and include it in your foodie blog, that is not normally going to be a fair use just because you think it is news.  However, if the blog is not commercial – in the sense of the blog does not earn you any money – either directly or indirectly, such as from advertising, then that is factor in fair use, though not dispositive.   The second is that many people’s immediate reaction is – well only like 50 people saw the image, or “only my family saw the image” or similar.  Copyright law does not turn on the external number of views.  An infringement occurs if you exercise any exclusive right in the copyright, regardless of whether even one person saw it.  Having said the above, to be sure, fair use is a real legal concept and there are cases in which the unlicensed use of a copyright is permitted under that doctrine.

At this point then, if you have determined there might be an infringement, the question is how to resolve the issue.  Even if you feel like you were making a fair use, just the elimination of risk can have some value.  So then you need to determine – what can a copyright holder recover in damages?

In the US, if the registration was filed within 90 days of publication, or before the infringement occurred, the copyright holder can recover statutory damages and attorneys’ fees.  Those statutory damages range from $750 to $30,000, however, criminal infringement can carry a damage award of $150,000 per infringement.  Having noted that, however “In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.” This is known as an “innocent infringer.” To be an innocent infringer, however, the work needs to have omitted a copyright notice.  If you see a work that has a copyright notice on it (and again, that can be contained in meta data), and you infringe, you cannot be an innocent infringer.

One note about “per infringement” – an infringement is a single exercise of an exclusive right – again, without regard to how many people see the work.  So, for example, the posting of an image on a website is a single act of infringement – whether 1 person or a million saw it.  However, then embedding it in an email . . . is a separate instance of infringement.

Step 5 is now to determine whether to try and resolve the claim yourself, ignore it, or hire a lawyer to resolve it. A few notes on what we have seen:

1. A fair number of letters we see omit a copy of the registration certificate, or any explanation of the claim of infringement.   We would normally never resolve such a claim without seeing the registration certificate and verifying at least to some extent, that the registration is valid.

2. The dollar amount requested is often very bizarre.  For example, $3,568.  How is that determined?  The letters often make no explanation.  In our view, the number should be an even number, most typically based on $200, or $750, unless some evidence of bad faith infringement is shown.

3. The release included or provided if you do pay is often woefully inadequate.  For example, it often is related to a single example.  If a client pays, then it should be released for all uses of any kind in any media through the date of payment. The releases often include other notoriously oppressive language, like arbitration clauses, weird venue clauses in other states, and a variety of other terms that are oppressive and unfair, like future liquidated damages clauses.

While we have helped many of our regular business clients with these issues – it can be tough to help a “one off” personal infringement – as our fees rather quickly approach the amount sought by the copyright troll.

And a final note – if things get very bad and you get sued – HIRE A LAWYER (not us, as we generally restrict our litigation to inside the USPTO).  You may have rights under the AntiSLAPP legislation applicable in many states.  The copyright law generally gives the prevailing party a right to recover their fees – and in some cases in actual court, you can make a special type of offer, and if the plaintiff ultimately wins, but less or equal to your offer, then they have to pay your fees.

Shortened USPTO Deadlines – how it affects trademark applications

by | Dec 27, 2022 | Intellectual Property, Trademarks

Historically, trademark applicants have generally had six (6) months to respond to an Office Action issued by the United States Patent and Trademark Office (“USPTO”) for the response to be considered timely.  This is a lengthy period, but at times, this lengthy time period could be beneficial to a client from a strategic standpoint.

However, the USPTO recently shortened this response period significantly beginning this month.  For USPTO Office Actions issued as of December 3, 2022, applicants have three (3) months to respond to an USPTO Office Action.  This shortening will be very helpful in moving applications along faster and in removing applications where applicants do not respond.  For instance, at times a previously filed trademark application may be blocking registration for another applicant’s mark.  Although one may sense that the blocking previously filed application will not be able to reach registration successfully (either due to an office action, going out of business, etc.), that previously filed application will sit on the record for six (6) months, and then for an additional two (2) month revival period.  Meanwhile, the subsequent applicant’s trademark application sits on suspension throughout this time period, except in certain situations where there is a successful effort in getting the previously filed applicant to abandon its application or consent to the subsequent applicant’s registration.  By cutting the response period in half, the previously filed application can be removed from blocking others who are seeking registration. 

At times, however, applicants may need more time than 3 months to respond or the prior 6-month response may be beneficial for the applicant from a strategic standpoint.  Thankfully, the USPTO will still allow an applicant to have the full six (6) months to respond to its Office Action; however, to obtain this additional time period, an applicant must request a three (3) month extension and pay a fee for the extension, which is currently $125.

For the time being, this shortened response period applies to trademark applications only – preregistration, and not post-registration office actions.  The USPTO will not implement this shortened time-period for post-registration Office Actions until October 7, 2023.

From a practitioner’s standpoint, it will be important to advise clients of this shortened time frame upon receipt of an office action, and to advise clients that the remaining three (3) month period is still available when needed, but at an additional cost.  Further, practitioners will want to ensure that their internal docketing and deadline systems are updated to reflect the shortened time-period, so that they are up to date on their clients’ trademark applications.
If you have any questions, please feel to contact Kimberly Grimsley or Jennifer Mumm. 

Copyright Infringement Small Claims Court Services

by | Jun 8, 2022 | Copyrights, Intellectual Property, Litigation

The Copyright Small Claims Court will be commencing operations in a few weeks (late June, 2022), and Oliver & Grimsley is pleased to announce that we will be providing both plaintiff and defense services for copyright small claims actions.

Copyright small claims actions should be a cost effective way of enforcing copyrights in the United States, if the copyright holder is primarily seeking a determination of infringement, and willing to receive an award of no more than $30,000. There are some considerations to keep in mind, however.

One advantage is that Copyright small claims actions can be filed without having previously received a certificate of registration, and without filing an application for special expedited status (which is expensive). However, an application for a certificate of registration must have at least been filed at the time of filing a small claims action.

The ability to file small claims efficiently should also provide a slightly better basis for pre-litigation resolution, as prior to this, it has always been a bit of a poker game to figure out whether an actual full suit would be filed in Federal court. Federal cases are very expensive, and if the copyright was not timely registered (see note 1), no statutory remedies or attorneys fees are available. With the ability to file claims informally, for much less cost, and without significant risk of years of discovery, a defendant receiving a cease and desist letter will have to more carefully consider whether a small claims action might be filed. However, the defendant receiving a small claims complaint can treat that claim as a true case or controversy, opt out of the proceeding, and commence a declaratory judgment action in some remote location, so this risk is not mitigated with the small claims process.

The biggest problem with the small claims process is that the small claims court is not mandatory – it is elective. If a defendant has such a claim filed against it, it can “opt out” of the proceeding, in which case “If you opt out, the CCB will dismiss the claim against you, but the claimant can still bring the same claim in federal court.” See https://ccb.gov/respondent/. Therefore, a plaintiff could go to the trouble of filing the small claim, spending money and filing fees, only to have the defendant opt out, and then the plaintiff has to start all over again in Federal court. It is virtually never cost effective to file a Federal court claim in the $30,000 range, so it will be easy for defendants who determine their risk is only at or around that number, to opt out and thus bet that the plaintiff will not follow through.

On the other hand, if a defendant believes that the claim is higher than $30,000, and there is real risk of plaintiff winning and also collecting fees (see note 1) – then opting in might make sense for the defendant.

In short, there is no one answer whether a plaintiff should file in small claims, and no one right answer whether a defendant should opt out. However, as the process is currently set up, it is generally going to be more likely that a defendant elects to opt out, especially where the plaintiff failed to timely register their copyright, and cannot seek statutory damages and the collection of attorney fees.

Note 1: Under 17 U.S.C. § 412, statutory remedies and attorneys fees are not available to a plaintiff/copyright holder unless the effective date of registration is either within 3 months of first publication of the work, “or 1 month after the copyright owner has learned of the infringement,” https://www.copyright.gov/title17/92chap4.html#412

Intellectual Property issues in NFT (non-fungible tokens) sell side transactions

by | Feb 3, 2022 | Business Law, Intellectual Property

NFTs are unique, effectively non-destructible tokens stored in the blockchain – a decentralized ledger system that uses computing resources to validate the holder of cryptographically unique data without reliance on a single source of truth such as a bank or government [further reading].  The NFT references a link to a resource – typically on the internet or in a game – where some content is available.  An NFT has a single owner (which can be an entity), and generally NFT’s cannot be subdivided once they are created, though they can be transferred.

An NFT can represent anything – digital art, a book, a page from a movie script, a signature, a title document to a car or house or real estate, an in game “skin” or custom article, a representation of something in a virtual reality construct (currently being referred to as the metaverse), like clothing, shoes and so on.  It can also link to something that is itself a representation of something tangible – for example, an NFT can link to a digital object that might be used in a game, as an avatar or in the metaverse, but that also is created tangibly (for example, this shoe created using artificial intelligence), or it can be an electronic representation of part of the notes to a very famous song.  A decent list of many potential uses of NFTs is set out in this article 15 NFT Use Cases That Could Go Mainstream.

NFTs were originally born from a desire to find a way to establish the “provenance” (title) to digital art.  See NFTs Weren’t Supposed to End Like This.   As pointed out in that article, the blockchain cannot actually store the thing it points to – for example, an image – there is not enough space. It only has the space to really hold a link to that image. As NFT use becomes both widespread and also, referencing property that the NFT holder might not own, many legal issues are now coming to light.

Who owns an NFT and exactly what do they own?

A case filed a few days ago on February 1st is challenging the sale of the “very first NFT” by Sotheby’s for 1.47 million dollars. Free Holdings Inc. v McCoy et al., case number 1:22-cv-00881 (S.D.N.Y).   In that case the Plaintiff claims that the sale of the NFT, which is apparently a copy of the original token the founder of NFT’s created, violated its ownership rights to the actual NFT, which it claims to have in its wallet.[1]   The defendants have apparently asserted that the actual NFT (the digital token itself) was “removed” or “burned” from the Namecoin blockchain where it was created, and thus does not even exist.  The plaintiff is claiming that the original owner allowed the token to “expire” and it somehow renewed that token and placed it in its wallet.

This case presents a novel issue . . . what does “title” to an NFT really mean?  The NFT itself is represented solely electronically (a token stored in a blockchain), and only functions electronically – once retrieved, it points to a resource on the internet and identifies the person holding the token as the true owner of … what? That link? The actual resource that is at that link?  Is a picture of the token framed as art actually the NFT (and who owns the token itself, the text string)?  That token is publicly viewable by anyone – the blockchain just limits how it can be transferred, and identifies the NFT holder as at least someone who has digital rights to the link. Is the token itself a copyright?  We may get some guidance in the Free Holdings case.

A person who purchases an NFT should be aware that they are only really purchasing a public and decentralized proof system that establishes that they are the owner of the token, because that token is in their wallet. The actual thing displayed at that resource location probably is under copyright protection, and the owner of the copyright is probably not transferring ALL of the rights to the copyright in whatever that resource depicts. However, there is probably at least an implied license to publicly display whatever the NFT points to on the internet (or in a game, or the metaverse, or wherever that content can be displayed). The result is very similar to the result when someone buys a physical painting or art object. While they have title to that thing (the tangible thing, the painting) – in the absence of a very specific agreement, they do not own the copyright represented by that thing.

What rights must a person who creates an NFT have to the underlying content or server?

Those are very good questions. Could I create an NFT to any URL on the internet (i.e. to any picture that is publicly viewable) and sell that? Do I have to be the “owner” of that image or have any license to it? Do I have to control the web server that serves that image upon a request? What disclosures do I have to make to a purchaser of the NFT as to what rights they are receiving, whether I am the copyright holder of the image, or that I control the server? Does the contract imply I will perpetually, until the end of time, maintain that server and that resource location? What happens if I go bankrupt, or the blockchain service I used goes bankrupt, or the server company? Can multiple NFTs be sold that point to the same resource? Does the NFT platform owe a duty of due diligence to verify rights in the underlying resource? There is nothing built into the NFT or blockchain system that requires unique resource links. Even if an NFT provider limited links to be unique, other NFT providers need not respect that prior link and can create NFTs in their blockchain, pointing to the same resource.

Most NFTs are sold using “smart contracts” – which are essentially a series of pre-made instructions in the blockchain that, when triggered, simply occur. See How smart contracts work. No human sees them, nor reviews them, approves them, or checks they were made or not made. The whole idea is that the blockchain system itself verifies the “transaction” occurred, without human involvement and without a centralized verification system (such as an intermediary bank, certificate signer, government title repository etc). They are not the proper place to agree to whatever license rights and obligations are connected to the underlying resource represented in an NFT. Even if they were, the smart contract process will not meet electronic signature requirements under UETA or ESIGN which are applicable in the US. Those terms would have to be in the underlying terms of service of the NFT provider and the NFT seller.

These issues will play out under traditional legal principles – in the author’s view predominantly under contract law (based on what the terms of service of the NFT provider and seller say), under advertising law – what disclosures must an NFT seller make to meet the requirements of advertising law – that the sale was induced by truthful, non-misleading and fair representations about the NFT?, under the law of publicity rights (use of a person’s likeness to sell a product or service), and of course finally under intellectual property law, principally copyright law.

On that last point, at least under US law, a question arises whether the Digital Millennium Copyright Act notice and take down provisions will apply to NFT transactions. For example, suppose person X sells an NFT to a linked resource at location Y, and was not the owner of the copyright of the image there. If the purchaser does nothing else (such as displaying that image embedded in a game or web page) – can the copyright owner force the NFT platform to take that down that link – assuming the copyright owner does not control that resource? Is that NFT itself a violation of 15 USC 1125(a), indicating a false association with the owner of the copyright (or perhaps implicitly stating the NFT owner owns the copyright?). Under certain cases in the US (e.g. Dastar), misrepresentation as to authorship is often not an actionable.

Are NFT providers liable for NFT sales that violate the rights of a third party?

Most third parties will not have agreed to the NFT provider’s terms of service, which undoubtedly will disclaim liability for any claims arising from acts of the NFT seller. If the third party’s rights are violated, can they sue the NFT provider? In the US, the NFT provider may have immunity under Section 230 of the Communications Decency Act if the NFT is “information provided by another information content provider”. But is it? The NFT provider actually creates the NFT and provides the functionality. However, the NFT owner is the person creating the information that is stored in the NFT.

Summary and some recommendations

There are more questions than answers today, however in any NFT sale transaction, at least the following should be closely reviewed:

  • The terms of Service of the NFT Platform provider. A buyer will be agreeing to these terms. They are likely not favorable to the Buyer, and also likely not negotiable. As a result, the value of that NFT is highly dependent on the reputation and likelihood of that platform staying in business.
  • The terms and conditions of the sale from the Seller. Does the Seller represent it has the IP rights to the resource? That they are unique? Will not be resold in a different NFT? Is their liability limited or remedy limited?
  • Some diligence into the actual art/resource/item should be done – and this may be very difficult. There are no real regulations in this area (outside of general unfair and deceptive consumer protection laws) – so even finding the true author or owner of a work may be very difficult – even in the US where we sort of have a registration system. The less able a buyer is to verify the provenance of the underlying resource, the more strongly worded the representations, warranties and consequences of breach should be. In a worse case, an escrow should be set up so that some post transaction verification can occur before all, or at least some, of the actual transfer of the cryptocurrency occurs.

For more information, contact Mike Oliver or Kim Grimsley.

[1] – Etherscan defines a wallet as follows: “A wallet address is a publicly available address that allows its owner to receive funds from another party. To access the funds in an address, you must have its private key.” Link