Legal Geek No. 192: A Spooky Legal Battle over Vampire Drinks

Hi, and welcome back to Legal Geek. This week, we celebrate Halloween with a review of a recently-filed lawsuit over Vampire drinks, and we don't mean blood.

https://archive.org/details/legalgeekep192

Happy Halloween everyone, and I hope you find plenty of treats and not many tricks. In the legal world, we have many tricks up our sleeve, including reverse confusion in trademarks. But before we bite into that concept in detail, let's explain the conflict leading to the case we're covering today.

Vampire Family Brands is a California company that has sold Vampire-branded wine since 1988. In the 3 decades of operation, Vampire has extended itself into other fields including Vampire Taco and Vampire Gourmet Bloody Mary Cocktails. Nothing is more on brand than using Vampire for a bloody mary, after all. Vampire has sued the owners of the Applebee's brand and their major franchisees for alleged trademark infringement.

Applebee's restaurants introduced a $1 cocktail called the Vampire cocktail this month, a drink that is a Tiki beverage consisting of rum and various fruit drinks, served with a plastic set of vampire fangs. This is being done as a loss leader to bring in customers to purchase meals at Applebee's, and Vampire Family Brands did not take kindly to this invasion of their dark-themed liquor space. So this lawsuit was filed claiming that Applebee's is infringing the Vampire trademark in this endeavor.

The legal theory of the case is what is known as reverse confusion. Unlike regular consumer confusion, where a usually-smaller startup infringes the branding of a more established company that has built up consumer goodwill in the brand, reverse confusion is defined by having a powerful entity upstart that threatens to link itself to a smaller pre-existing brand. In other words, Applebee's, the new kid on the block to Vampire drinks, has large resources to market and advertise to consumers, which may lead to the consumer confusion that Vampire Family Brands is an unauthorized user of trademarks that the bigger company Applebee's owns.

Vampire Family Brands does have several federal trademark registrations on various glassware and food and beverage products, including restaurant and bar services. This entitles them to a presumption of nationwide rights and that means a valid case can be made against Applebee's here. That being said, the alcoholic drink itself is not identical to anything Vampire Family Brands has registered as a covered good or service, nor is the Tiki drink identical to anything Vampire Family Brands offers. That gives Applebee's a counterargument to make, but the Vampire drink is really being used to promote restaurant and bar services, which is covered by a live registered trademark. The facts seem to favor the small company Vampire, so perhaps Applebee's will have to submit to a settlement here to avoid being put in a casket of damages.

The Bottom Line is: October never fails to give us a good spooky themed legal case, and this year it is a battle of Vampires that Bram Stoker would be proud of. This proves the importance of big companies doing some clearance research before launching big marketing campaigns and new brands, as the Vampire trademarks would have been readily apparent upon a quick search of the US trademark database. Applebee's could've avoided hot water here, but maybe they will find a wooden cross or silver dagger to save them in this legal fight.

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Legal Geek No. 191: The Continuing Reach of Ms. Pac-Man

Hi, and welcome back to Legal Geek. This week, we review a current lawsuit in California showing that the rights to the arcade classic Ms. Pac-Man are still very valuable, at least to the two parties in dispute.

https://archive.org/details/legalgeekep191 

Bandai Namco Entertainment America is the rights holder for publishing the Pac-Man and Ms. Pac-Man games.  Bandai has sued a maker of retro game systems called AtGames Holdings for alleged trademark and copyright infringement over the use of Ms. Pac-Man concepts and assets.  Despite being initially released to video arcades in 1981 as a sequel to the original Pac-Man, the desire for players to continue playing this game remains high and thus, the IP rights remain valuable.

AtGames had previously dealt with Bandai in a license agreement over the original Pac-Man game.  Apparently the quality of the game products brought to market did not comport with what Bandai expected and demanded, and as such, AtGames lost the licensed rights to make this game.  When AtGames approached Bandai for a license for Ms. Pac-Man, Bandai refused.  

Trying to find another route to these rights, AtGames has apparently engaged with the game's original inventor to purchase some rights to Ms. Pac-Man.  AtGames then began producing a couple prototypes and discussed them with retailers.  Bandai sued AtGames a few weeks ago over this, asking in addition for a temporary restraining order to stop any activities of AtGames in this regard.

So if both companies hold some legitimate rights to the property, who will win?  Assuming this case does not settle, the odds still favor Bandai at this early stage of the proceedings.  Although it is unclear what exact rights were sold by the inventor to AtGames, one possibility is the copyright termination right now provided to authors of works that were made on or after 1978, and if this is the case, an interesting split of rights will eventually occur.

Authors have the right in the U.S. to terminate any copyright assignment or license previously made after 35 or 40 years from the grant of rights or publication, so long as notice is provided sometime after the 25 or 30 year mark.  This allows authors or their estates to have another chance to negotiate rights transfers, particularly for creative copyright works that are of significant ongoing value.  Assuming any copyright the inventor held was assigned to Namco around 1980 or 1981, the 35 year term from publication ran out a couple years ago and so this work would be eligible for a termination proceeding.

Thus, AtGames may potentially have some of the copyright rights moving forward under this scenario, while Bandai of course continues to own the trademark rights they have developed from 4 decades in the marketplace.  This could force the parties to the negotiation table to figure out a resolution that allows both to continue practicing and exploiting the Ms. Pac-Man IP.  Otherwise, both parties could be locked in a standstill with no products being available to end consumers.  Who knew a classic arcade game could raise such complex legal issues.

The Bottom Line is: protecting the ongoing long-term revenue stream from Ms. Pac-Man is obviously important to Bandai, so it makes sense that they have brought AtGames into court to try and stop the competition.  However, really old properties can be subject to things like copyright termination, which complicates the ownership issues and provides leverage to third parties like AtGames.  It's an interesting legal conundrum we will keep our eyes on.  If there's any lesson to be learned for the common man here, it is that when license negotiations for rights break down, it is exceedingly hard to find alternative ways to properly use the rights, so it is generally better to move on to another property rather than risk a lawsuit.

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Legal Geek No. 190: The Limits of Design Patent Protection

Hi, and welcome back to Legal Geek. This week, we review a recent Federal Circuit appeals case on design patents that confirmed just how far they can extend in the US.

https://archive.org/details/legalgeekep190

In the US, patents are offered on two types of innovations: utility patents for functional inventions, and design patents for ornamental and aesthetic designs of articles of manufacture. The easiest way to understand the difference is to provide the example of a table lamp, in which how the electricity functions to illuminate the bulb would be covered by utility patents, while the design defining how the lamp looks to consumers would be covered by design patents. Design patents are more like trade dress and in most other countries, designs are registered like trademarks instead of examined for patentability.

Design patents have been used a lot in recent years, especially by software companies to cover ornamental features in things like user interface designs. Perhaps most notable is the Apple v. Samsung conflict which led to damage awards of billions of dollars based on the look of a phone user interface. As these companies begin pushing the boundaries of how broad design patents can be, we come upon the current case to discuss today

This case between Curver Luxembourg and Home Expressions is interesting because it involved design patent interpretation in a scenario not previously opined upon in the courts. Curver filed a design patent entitled Furniture Part to cover an overlapping Y-design to be used on furniture in 2011. The drawings did not show the design in use on furniture, just the design by itself. During prosecution, the Patent Office Examiner objected to the title based on being too vague. Curver amended the title and the claim of the design in response to refer to this as a pattern for a chair.

Years later, Curver went to enforce this design patent against Home Expressions, which was using a substantially similar overlapping Y-pattern in baskets. Home Expressions objected to this lawsuit, claiming the design patent was limited to chairs. But as stated previously, chairs only shows up in the words of the patent, not in the drawings, and the drawings are usually what defines the claim scope of a design patent.

The Federal Circuit confirmed the lower court decision in this case that the design patent was limited by the words to implementation on a chair, thereby not being able to cover the Home Expressions baskets. The court relied on 100 years of case precedent and Patent Office practice in forcing design applications to be limited to designs as used on an article of manufacture, not just abstract 2D designs. Because no guidance on the article of manufacture was given in the drawings, the court could turn to the words of the application and make them limiting in this case. Thus, design patents are confirmed to not extend to designs absent specific goods, imposing an important limit on how broad these patents can be.

The Bottom Line is: design patents are an important tool for manufacturers to use in covering all aspects of their products, but just like utility patents, they cannot broadly extend to underlying abstract ideas and concepts. While the unusual fact pattern presented by this case may not be repeated again soon, this does provide guidance to how design patents have limits which may define when other types of IP protection may be more appropriate for use to cover a product or invention.

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Legal Geek No. 189: Name and Likeness turn tide for NCAA Athlete Pay

Hi, and welcome back to Legal Geek. This week, we review a California law passed this week that is causing a significant shift in the discussion over athlete compensation in college sports, and the next steps following the California law.

https://archive.org/details/legalgeekep189

California's legislature passed a bill entitled the "Fair Pay to Play Act" recently and governor Gavin Newsome signed this to make it a law become effective in 2023. The law prohibits the NCAA, the organization that regulates college athletics in the US, from punishing students who earn money through use of their names, images, or likeness. This law is in direct contravention to a long-standing NCAA rule that made athletes ineligible if they made money from their status as college athletes.

In short, an athlete will be able to do an autograph signing or an endorsement deal using their fame to make some money without suffering any eligibility concerns, just like other non-athlete students can do currently. If you've got fame from whatever source and can monetize it, now you will be able to.

The debate over college athlete compensation is a long one and we've covered other developments including some private university players considering unionizing. At every step of the process, college administrators and the NCAA have argued that competitive balance would be undermined and that college sports would be in jeopardy as a whole if such reforms are made. Yet when previous reforms like providing food to players and providing stipends to players occurred, the world of college athletics did not really end.

Instead of pushing out ahead of these lawmakers and being forward-thinking, the NCAA and its member institutions have continued the company line about the importance of amateurism in college athletics. But as the revenue generated off these sports and athletes has grown and grown, the calls for some additional compensation have become impossible to ignore. So instead of having a chance to craft player compensation in a way that works best for the NCAA and its stated goals, now the organization will need to be reactive to what state and federal lawmakers are imposing on them, perhaps ending up in a worse place than if they had been proactive on player compensation.

To this end, many other state legislatures immediately introduced similar legislation as the Fair Pay to Play Act this week after California signed it into law. Anthony Gonzalez, a U.S. congressman and former football player, is also introducing a federal bill for consideration along the same lines. The federal government could avoid any state-by-state inconsistencies and this is likely where the NCAA will try to make their last stand against this part of amateurism. If recent case and legislature actions are any guide, the outcome won't go well for the NCAA.

The Bottom Line is: as with many legal issues, this all boils down to money. There's simply too much money in college athletics, especially football and basketball, without any significant compensation going to the athletes who make these sports exist in the first place. There will continue to be debates on how to fairly compensate the efforts of these players beyond Name and Likeness rules, but this is a huge step in redefining what NCAA amateur athletics will be in the future.

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Thanks for reading. Please provide feedback and legal-themed questions as segment suggestions to me on Twitter @BuckeyeFitzy