Monday, March 25, 2019

Legal Geek No. 164: Space, the Final Frontier...of Intellectual Property?

Welcome back to Legal Geek. This week, we review an interesting question about intellectual property rights as they apply in space.  Is (INSERT Kirk - "Space...The Final Frontier") of IP rights?


Patent systems are designed to reward advances in the scientific fields by granting a limited-term monopoly in exchange for full disclosure of your invention and how to practice it.  After the 15 or 20 year term expires, an invention then goes into the public domain for others to freely use, thereby advancing the arts and sciences over time.

It makes sense that these incentives for securing patents are particularly valuable in fields with huge upfront costs of development, like biopharmaceuticals.  In other fields like software, it can be much easier to innovate or design around, and as such, those fields do not find patents to be as much of an incentive.  But one field with huge upfront costs of development does not fit into this mold, and that is space-related tech.  The reason for this may not be immediately apparent, but let's explain why this is the case here.

Patents are granted on a national or regional basis, meaning the monopoly rights you get are limited to the territories where you apply for and obtain the patent.  Although plenty of laws apply to outer space, there are massive loopholes thanks to the territorialism of patent systems that could potentially allow infringers to successfully avoid any patent infringement claims on space tech that is patented in one or more countries on Earth.

Interestingly, the U.S. has been on the cutting edge of trying to make sure whatever patent rights it grants are enforceable as broadly as possible, including in space.  To this end, since a 1972 Supreme Court decision that restricted infringement claims against exporters of components that are assembled overseas into an infringing product, Congress and the Supreme Court have made and interpreted many laws in such a manner to expand the reach of potential infringement claims to actions in other countries.  One of these is 35 U.S. Code Section 105(a), which states that U.S. patents extend coverage to any space object or component thereof under the jurisdiction or control of the U.S.

However, one huge loophole to this is that U.S. law cannot apply to any space object that is carried on the registry of a foreign state.  This is the same as maritime law that applies to ships at sea, depending on what country they are registered in.  Thus, a potential infringing U.S. company could make a device that infringes a U.S. patent if they do so in a spacecraft registered under another country.  Indeed, even launching such a spacecraft from the U.S. may not lead to liability for patent infringement if the infringing item is merely temporarily passing through the country on the way to space.

Considering that a lot of development of space tech occurs in shared spaces like the International Space Station, it seems silly that different sets of patent rules would apply depending on whether you are in the U.S. module, or the Russian module, or the European module of the ISS.  This international cooperation and shared space is not likely to go away anytime soon, leaving the patent reach into space unclear at best.

The Bottom Line is, space tech is one of the types of technology most ripe for the benefits of patent protection.  But unless international laws and treaties are formed that clarify how the territorial patent systems work in space, there will be tons of loopholes and exceptions that make it impossible to really enforce your patents rights in space.  For patents to viably reach the final frontier, they will have to boldly go where no patent law has successfully gone before.  It's an interesting conundrum for the future as we continue to spread beyond the realm of Earth.

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Monday, March 11, 2019

Legal Geek No. 163: Monopoly and Cards Against Humanity fight against Knockoffs

Welcome back to Legal Geek. This week, we review a couple more recent branding battles regarding well-known tabletop games, with reviews of ongoing cases and issues involving Monopoly and Cards Against Humanity.

We covered Hasbro last week in their copyright win over The Game of Life, and this week the gaming giant filed a trademark opposition to try and protect perhaps the most iconic brand of gaming, Monopoly.  A Croatian company is trying to register Drinkopoly as a U.S. trademark, and it has been allowed by the U.S. trademark office.  But as we've covered before, allowed applications publish for a few weeks to give the public and other rights holders a chance to object before a trademark finalizes into a registration.  That's what Hasbro did here, consistent with similar challenges filed in the last 2 years against other applications like Monopoly Movement, Monopoly Enterprises, Slotopoly, among others.

Hasbro is relying on its dominant market position to claim that despite the differences in the name, the Drinkopoly brand would lead to consumer confusion about the source of goods for that game.  Hasbro can throw some amazing stats up there, like 220 million sets of the game being sold since 1934, and the marks generating over $3 billion dollars in sales of products in the last decade.  Makes sense why they would spend a little cash being proactive to try and keep others out of the "opoly" brand field.  Hasbro has a good success rate in these trademark oppositions, but we'll keep our eyes on this challenge to see where it goes.

Our second subject this week is the party game Cards Against Humanity, whose owners have become much more willing to challenge other competitors in court or at the trademark office in recent years.  One such challenge wrapped up this week when the Appeal Board at the Trademark Office decided that Cards Against Humanity had a legitimate claim to oppose and stop the registration of a game expansion called Crabs Adjust Humidity.  

The Crabs expansion pack was released by Vampire Squid Cards three years after CAH came on the market, and the name and stylings were chosen as an absurdist rhyme of the original Cards Against Humanity.  Vampire Squid was extremely careful to try and avoid IP infringement here, and indeed, Cards Against Humanity initially sent e-mails granting some level of approval for Vampire Squid to sell the Crabs pack.  However, these agreements began to break when CAH objected to Vampire Squid selling the Crabs expansion pack at Target in 2015, and then this opposition to a trademark application filed the same year.  

The appeal judge ruled that while the two game names have very different literal connotations, the similarities in appearance, pronunciation, and overall commercial impression was too much to allow Crabs Adjust Humidity to co-exist over Cards Against Humanity objections.  Furthermore, although you can lose the right to object to another trademark by acquiescing to it in the field, the court interesting ruled that the early-stage agreements to let Crabs Adjust Humidity be used in some markets was not an effective legal acquiescence to registering the same trademark.  This case may set a precedent that gets cited in many other contexts where some initial approval of a competitor happens before a pull back occurs, so Crabs for everyone in future trademark cases!

So Cards Against Humanity wins again, just like they did when pulling another competitor Humanity Hates Trump off the Kickstarter fundraising platform.  Speaking of Kickstarter challengers to CAH, another knockoff-type adult card game called The Offensive Adult Party Game from a company called The Dragon's Tomb launched this week on the platform.  The game appears to use the same font and black and white card styles as CAH, which may be a bridge too far for a fair use defense.  I'd expect another Kickstarter takedown from Cards Against Humanity here, and if it does happen, it will be interesting to see if CAH gets sued by the company they take down once again, claiming such actions are improper.

The Bottom Line is, the most popular tabletop games are always at risk of competitors carving out places in the market with similar sound names or trade dress.  It is important for brand owners of valuable brands to protect and defend their turf, and that's why these gaming giants Hasbro and Cards Against Humanity will continue to fill this segment's coffers with interesting news stories to cover.  Until next time, enjoy the gaming!

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Monday, March 4, 2019

Legal Geek No. 162: Copyright News on The Dark Tower and The Game of Life

Welcome back to Legal Geek. This week, we check in on a couple recent copyright cases that touch on some of our favorite subjects: fantasy novels and tabletop games.


In January, a Rhode Island federal court ruled that the heirs of some people involved with the creation of the tabletop board game The Game of Life could not control the board game's intellectual property, at least from a copyright standpoint.  This was a huge win for Hasbro, who stood otherwise to potentially lose the rights to print the still-popular classic of the tabletop industry.

In the 1950s, the physical prototype for Life was made by employees of Bill Markham.  However, a fellow toy developer named Reuben Kramer developed the idea into a product at his own expense, which made him the sole rights controller when it came to copyrights.  Under separate agreements, Kramer has been paying Markham and his estate more than 30% of royalties received from the license with Hasbro, but the court judged that this does not mean they also share control of the copyright.

This is important because in recent years, more copyright owners have taken advantage of a right known as the termination right.  For licenses and assignments of copyright that occurred on or after 1978, the original author or their heirs can terminate the license or assignment 35 or 40 years after those rights are granted.  This has come into play starting in the last 3-5 years, and it generally allows authors to re-negotiate successful licenses or assignments to extract more money from a publisher.

Markham's estate and company were claiming control of the copyright based on their involvement of making the game prototype, which would have allowed them to exercise the termination right and go directly for more money from Hasbro or some other game publisher.  But the court held that this was a work made for hire under the law, therefore controlled only by the financial backer Kramer, who can choose for himself whether to terminate the copyright license and renegotiate his terms.  It's obviously easier for Hasbro to negotiate if necessary with one owner instead of many, so that's why this is a big win for Hasbro in their game of life.

Our second story comes from the past week, when a Florida federal court dismissed a copyright infringement lawsuit against Stephen King based on The Dark Tower series.  A nephew of a now-deceased comic writer William DuBay claimed that DuBay's 1977 horror comic book The Rook had been ripped off by King when he created the wildly-successful Dark Tower series of novels.  With this series now spawning a movie and a TV series, a finding of copyright infringement could lead to massive damages for DuBay's heirs.

But the Florida court dismissed this claim because while there is some overlap between the time-traveling cowboy lead characters of these two works, this was only a surface level similarity and the differences or dissimilarities go much deeper for these characters and works.  Even if Stephen King had been inspired by The Rook, which seems uncontested, he created his own universe and copied only typical tropes and well-known story elements in these fiction genres, according to the court.  So just like Hasbro, King can sleep a little better knowing his IP has been defended against a financial and legal attack.

The Bottom Line is, these are but two of many examples of how successful creators or publishers can fall into legal battles when big money is involved for copyrighted works.  The music industry is rife with such copyright claims and lawsuits, for example.  With copyright terminations now becoming a viable option, expect even more big stories and products containing creative authorship works in the future.  We'll keep our eyes on future cases of nerdy interest, but if you ever need help navigating these choppy waters of copyrights and IP, just reach out to the Legal Geek or another local counsel.

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Tuesday, February 26, 2019

Legal Geek No. 161: Celebrity Patents

Welcome back to Legal Geek. This week, while many are preening over the outfits and the awards given to celebrities at the Oscars, we take a look at some patents granted to celebrities which may surprise you.  Who knew some of these people were also inventors?
Good ideas can really come from anyone, and celebrities are no different. Let's look at a few granted U.S. patents and their well-known inventors famous for something entirely different.

Back in the 1980's when Jamie Lee Curtis was working on Halloween movies among other hits, she was also having children. One time when changing a diaper on her daughter, she discovered she left the wipes across the room, which made for a tough conundrum of leave the messy diaper open to go get the wipes, or try to deal with the mess without wipes. So she invented and patented the Dipe and Wipe, a diaper with a pouch to hold wipes on site at all times. This patent granted in 1988 and was never heavily marketed, but it is in the public domain now for all to use, if wanted.

Neil Young is better known for his music as a two-time Rock and Roll Hall of Fame inductee, but his passion on the side is model trains. He has a barn filled with model trains on his property. He actually held an ownership stake in the model train company Lionel for a while in the 1990s, and developed and patented several things for the company during that time. One patent covers a controller that sends signals to model train locomotives using an electromagnetic field rather than requiring actual contact with the metal track materials, which was developed to helped his son with cerebral palsy control and enjoy the trains. He also patented a model train horn system that better allowed an operator to simulate many of the locomotive noises a real train makes.

Before Bill Nye became "The Science Guy" on children's TV, he was a mechanical engineer who worked at Boeing Corporation. Just because he stopped being a full-time engineer doesn't mean he stopped inventing, and it's no surprise many of his inventions stem from the shows he produced. But one particular patent on ballet toe shoes stands out as way outside Bill Nye's normal field. When he interviewed Seattle ballet dancers who were appearing on an episode about bones and muscles, he realized the toe shoes ballet dancers use to dance en pointe could be improved to help avoid many of the injuries young women were experiencing from this dance form. His patented shoe from 2005 adds a tubular support sleeve and a particular polymer material for additional shock absorption. 

The Bottom Line is, the patent field is full of inventors from all walks of life, including these celebrities who we consider to have extraordinary skill in another art. Inspiration can come from everyday problems, and those same problems being solved is precisely the type of evidence patent offices in the U.S. and other countries find persuasive when deciding to grant patents. While many look forward to the next fashion statement on the red carpet from celebs, I look forward to being surprised by new inventions these same people can come up with.

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Monday, February 18, 2019

Legal Geek No. 160: Expiring Digital Copy = False Advertising?

Welcome back to Legal Geek. This week, we review a question sent in by a listener Justin regarding expiring digital copy codes on movies, and whether that can be deemed false advertising.
Most of us have probably experienced this: you buy a movie from the sales or clearance rack at the store, take the disc home and log on to your computer to claim the included digital copy...and bam, code expired. No digital copy. Or perhaps you forgot to enter the code when you bought the movie and you discover this a couple years later, only to find that the digital copy code is no longer valid. In either case, it's highly frustrating, especially as many move away from print media and discs and store everything digitally or in the cloud.

Well that's roughly what happened to Justin, our listener with the question. He bought a movie with a "digital copy included" label on it, with no expiration date listed on the package, only to find out once he opened the movie that the code expired 5 days earlier. He cannot return the movie since it is open, but he did not get the deal he was hoping for. Does that create a false advertising claim under the law?

You'll be shocked to hear that it's a gray area, the lawyer's favorite playground. False advertising under the law requires advertisement of a product in a misleading way, to make the purchaser believe the product performs better than it actually does. Although many states have some false advertising laws, we will focus this segment on the two federal laws on point: the Federal Trade Commission Act and the Lanham Act, the latter of which establishes trademark law in the U.S.

The FTC Act defines false advertising as advertisements that make representations that the advertiser has no reasonable basis to believe, and only the FTC can enforce this act. We covered some FTC cases a couple months ago, but looking through their archives, it does not appear that expiring digital movie copies have led to a decision under this law as of yet. It seems unlikely that a movie seller would be liable because the representations made of a digital copy being available were likely reasonable and true when the movie disc was produced and sent to retailers. In other words, the only way a seller would have no reasonable basis for belief in advertising a digital copy was included would be if the code for the digital copy expired before the discs could hit shelves, or if the codes were never valid at all. This is a high burden to prove and so I don't expect the FTC to weigh in on such a case.

The Lanham Act defines false advertising as having the following 5 elements, each of which must be proven: (1) false statements of fact were made about the product; (2) the false advertisements deceived or had the capacity to deceive a substantial segment of consumers; (3) the deception was material; (4) the product was sold in interstate commerce; and (5) the party suing the advertiser was injured by the deception. 

There's a few potential holes in arguing these 5 factors in Justin's case. First, if the digital copy were valid for a long period of time before he chose to purchase the movie, then it's unclear whether the "digital copy included" label is really a false statement. Especially if the general consumer understands that the standard or common market practice is for digital copy codes to have an expiration date, then it may not be that such a label has a capacity to deceive a substantial segment of consumers. A movie seller could also argue against the materiality of the deception here, as the buyer still receives a copy of the movie they purchased, just on a disc, and if they purchased solely to obtain the digital copy, there were other ways to do that more directly than buy a disc. Particularly if the movie was bought on a sale or clearance rack, the consumer might be expected to understand that the lower price is available in part because the digital copy is no longer available, lowering the market value.

A claim could be made for false advertising, but under the available U.S. laws, it would be exceedingly difficult to prove. It would be best practice for movie sellers to include expiration dates on the outer packaging of a movie, and some do, but it may not be required under the law.

The Bottom Line is, false advertising is a unique branch of law that is honestly more focused on large-scale scams than individual grievances. That being said, some movie companies will still honor the digital copy and offer you a new (valid) code if you reach out to them with your complaint after buying in circumstances like Justin did. That's probably the easiest solution, given that no company wants to deal with bad customer P.R. or a lawsuit, even if such a lawsuit would likely be in their favor in the end. Thanks Justin for this great topic suggestion, and I hope you find some resolution to your digital copy conundrum!

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Monday, February 11, 2019

Legal Geek No. 159: Nobody Outsponsors the Hut, and Cryptokemon!

Welcome back to Legal Geek. This week, we cover an interesting story that broke in the weeks leading up to the Super Bowl: a fight over the trademark for "The Official Pizza of Football."  We also look at another recent trademark opposition involving Blockchain and Pokémon.
Our first case comes when Genesco Sports Enterprises, a Dallas based company, filed to register a U.S. trademark for Official Pizza of Football.  One might immediately assume the NFL or NCAA would oppose such a registration to maintain their licensing rights, but you'd be wrong.  Instead, it's Pizza Hut that stepped up to oppose this registration.

Pizza Hut has submitted extensive evidence showing their official and exclusive pizza sponsorship deals with these sports organizations and the ESPN College Gameday show.  As a result, the company claims that Genesco's registration would mislead consumers to assume deals were made that are not actually in place.  The fun assertion here is that Pizza Hut is trying to prove who is the official pizza of football, a rare piece of levity in the opposition board proceedings.  But Pizza Hut spends a lot of money to do those sponsorships, so it makes sense they would spend a small amount of legal fees to protect their brand position.  I suspect Pizza Hut will successfully oppose this other registration based on the overlap of their slogan with this intended mark.

If nothing else, we can all agree pizza is one official food of football, across the board.  But you can do so much better for Super Bowl party food, and I hope you did, considering how lame the game and halftime show turned out to be.

In our second story about recent trademark oppositions, Nintendo is back in front of the board opposing another company trying to register a brand too close to Nintendo's IP.  In this case, the trademark is for Cryptokemon, from a company called S&C Digital Solutions.  The intent is to use Cryptokemon to be a blockchain-based digital collectible pets game.

Sound familiar?  Nintendo thinks it does, as the collectible pocket monsters games called Pokémon would attest.  Thus, Nintendo is claiming that this mark is too similar to Pokémon and would confuse consumers by creating an association between the game properties and companies that will not exist.  Nintendo is trying to snuff out this cute title for a blockchain-based game, and it seems like it will be a close call on whether they will succeed.  The names are similar at the end, but that may not be enough to prove consumer confusion.

The Bottom Line is, whether protecting brand position bought by sponsorships and licensing, or guarding against any competitors using a similar sounding name, big companies continuously monitor those trademark applications about to register and they often oppose such applications.  It can be very difficult for small companies and individuals to compete in expensive opposition procedures, and that's probably what Pizza Hut and Nintendo hope for here.  We will keep you informed if any interesting developments come out of these opposition cases.

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