Intellectual Property

In the 9th Circuit (as well as the 2nd, 5th, 6^th, and 11th Circuits), the test for determining whether the use of a third-party trademark in an expressive work (i.e., use of a brand within a movie, TV series, video game, etc., including as part of the title of an expressive work) is the 2nd Circuit’s test from the 1989 case of Rogers v. Grimaldi. The Rogers test was adopted by the 9th Circuit in Mattel, Inc. v. MCA Records (better known as the “Barbie Girl” case). Under the Rogers test, the use of a third-party mark in an expressive work does not violate the Lanham Act “unless the title has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work.” As is evident, this is very different from the multifactor test adopted in AMF Inc. v. Sleekcraft Boats – (1) strength of the protected mark; (2) proximity and relatedness of the goods; (3) type of goods and the degree of consumer care; (4) similarity of the protected mark and the allegedly infringing mark; (5) marketing channel convergence; (6) evidence of actual consumer confusion; (7) defendant’s intent in selecting the allegedly infringing mark; and (8) likelihood of product expansion.” The reason for the differing treatment of expressive works is twofold: (1) they implicate the First Amendment right of free speech, which must be balanced against the public interest in avoiding consumer confusion; and (2) consumers are less likely to mistake the use of someone else’s mark in an expressive work for a sign of association, authorship, or endorsement.

Under the Rogers test, the first inquiry is whether the use of the third-party mark has “some artistic relevance”. The threshold for this test is extremely low; basically, if the level of artistic relevance is more than zero, this is satisfactory. If there is greater than zero artistic relevance in the use of the third-party mark, the next analysis is whether the use of the third-party mark explicitly misleads as to the source or content of the work. Although in most instances an “explicitly misleading use” requires an overt claim or an explicit reference to an association with the third-party mark. However, in Gordon v. Drape Creative, Inc., the 9th Circuit said that “the use of a mark alone may explicitly mislead consumers about a product’s source if consumers would ordinarily identify the source by the mark itself.”

Last year a federal district court in Colorado (which is in the 10th Circuit) addressed a Rogers type claim which was a question of first instance for that court and the 10th Circuit. The case involved titles of nature documentary series; one producer claimed that the title of a National Geographic nature documentary series infringed the trademark rights in the title of the producer’s prior series. The court declined to follow Rogers and adopted a new test.

In the 80s and 90s Marty Stouffer Productions produced a nature documentary series entitled Wild America that was televised on PBS. Today, episodes of Stouffer’s Wild America are broadcast on television, can be purchased on DVD and are accessible through a variety of streaming services. National Geographic is a producer of documentary programming on its Nat Geo TV and Nat Geo WILD stations. National Geographic had explored with Stouffer the possibility of licensing or purchasing Stouffer’s Wild America film library, but no deal was reached. In 2010, Stouffer declined Nat Geo’s request to use the titles Wild Americas or Wildest Americas for a natural history miniseries, advising that those titles were too close to Stouffer’s registered “Wild America” trademark. In 2012, National Geographic aired a series with the title Untamed Americas in the U.S. and the title Wild America outside of the US. National Geographic subsequently released nature-themed programs in the U.S. under the titles America the Wild, Surviving Wild America and America’s Wild Frontier. Stouffer then sued Nat Geo for trademark infringement and other claims.

This being a case of first impression for this particular circuit court and the 10th Circuit, the court, in ruling on NatGeo’s motion to dismiss, considered the purpose of the Rogers test – a means of limiting the application of the Lanham Act to protect First Amendment interests. While agreeing with the principal of the Rogers test, the court found faults with it and elected instead to create its own new test.

Displeased with the Rogers test, the Colorado district court adopted its own six non-exclusive factors to consider. Those factors are: (i) Do the senior and junior users use the mark to identify the same kind, or a similar kind, of goods or services; (ii) to what extent has the junior user “added his or her own expressive content to the work beyond the mark itself”; (iii) does the timing of the junior user’s use in any way suggest a motive to capitalize on popularity of the senior user’s mark; (iv) in what way is the mark artistically related to the underlying work, service, or product; (v) has the junior user made any statement to the public, or engaged in any conduct known to the public, that suggests a non-artistic motive; and (vi) has the junior user made any statement in private, or engaged in any conduct in private, that suggests a non-artistic motive?

And while the district court ultimately found for Nat Geo (as it would have under a strict application of the Rogers test), the interesting inquiry is why this court felt Rogers was insufficient. It seems that a significant factor in the court’s reasoning was the 9th Circuit’s holding in Gordon v. Drape Creative.

Gordon involved a trademark dispute between the owner of famous YouTube videos featuring a honey badger who coined the phrase “Honey Badger Don’t Care” and subsequently registered trademarks for various goods including greeting cards, and Drape Creative who produced a greeting card using variations of Honey Badger Don’t Care. The 9th Circuit, applying Rogers, found that the artistic relevance of Drape’s use of Honey Badger Don’t Care met the threshold of being more than zero, but ended up sending the case back to the district court in order to determine whether Drape’s use was “explicitly misleading.”

With the threshold of artistic relevance being so low and the requirement of an explicit or overt claim to meet the requirement of “explicitly misleading use”, the court concluded that “trademarks registered for arguably artistic products and services are not worth the paper that the trademark registration is printed upon.” Anyone can use a trademark, the court continued, “even to sell the same goods or service for which the trademark was granted, if the goods or service can be deemed ‘art’.” The court said that the Rogers test, taken at face value can destroy the value of a trademark if the alleged infringer is willing to be sued and defend themselves under the Rogers test.

It seems that the problem with Rogers, at least according to this district court, is the extremely low threshold of artistic relevance. In a case of this nature, the court stated that the First Amendment should place a “thumb on the scale of expressive use” and not “a fist”. This court’s “Genuine Artistic Motive” test allows the court to probe the motive for the adoption of the allegedly infringing use and include those facts in its analysis. And while Rogers remains the test adopted by a number of Circuits, it certainly would be interesting if this case were appealed to the 10th Circuit.

Finding Google’s copying a fair use, the Supreme Court ended Oracle’s decade-long attempt to recover copyright damages.  The battle began between these tech giants when Google designed its Android software platform for mobile devices, such as smartphones.  The platform allows “computer programmers to develop new programs and applications” for Android-based devices.  In designing the mobile platform, Google independently developed most of the code but copied what the parties referred to as “declaring code” for 37 application programming interfaces, or APIs.  The declaring code in APIs “enables a set of shortcuts for programmers.”  A programmer can select a particular task from the API’s task library without having to learn anything more than a simple command, thus allowing the programmer to use a library of prewritten code to carry out complex tasks without having to write the code from scratch.

At the time Google was developing the Android platform, many software developers were using Sun Microsystems’ Java programming language and its popular Java SE platform.  Oracle, shortly after acquiring Sun Microsystems in 2010, accused Google of taking critical portions of the APIs in the Java code for unauthorized use in its Android platform.  While Google independently developed the underlying code for the tasks, Google copied the declaring code for certain tasks “useful to programmers working on applications for mobile devices.”  “Without that copying, programmers would need to learn an entirely new system to call up the same tasks.”  With the “structure, sequence, and organization” of the APIs so similar, Oracle alleged Google infringed its copyrights.

The U.S. Constitution proclaims that copyright protection is to “promote the Progress of Science and useful Arts …”  Art. I, §8, cl. 8.  In particular, “copyrights protect ‘expression’ but not the ‘ideas’ that lie behind it.”  While Congress expressly expanded the Copyright Act to include computer programs, Google asserted that APIs are different because they are merely building blocks for developers, and the APIs exhibit little creative expression.  According to Google, it is standard for software developers to use APIs to increase interoperability between products.  Google argued that the material it used from Oracle’s APIs was not copyrightable because of this lack of creative expression.  But, even if APIs are subject to copyright protection, Google argued its use was protected as fair use.  The fair use doctrine “permits courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster,” such as when the copying transforms the original work into something new.

From a policy perspective, Google opined that applying strict copyright protection to APIs would have a chilling effect on developers.  In contrast, Oracle argued that allowing use of the APIs would discourage programmers from investing in software development if they knew they would not be compensated when others used their work.

In reaching its decision, the Supreme Court avoided the burning question as to whether APIs are copyrightable, stating “[g]iven the rapidly changing technological, economic, and business-related circumstances, we believe we should not answer more than is necessary to resolve the parties’ dispute.”  Instead, the 6-2 majority assumed for the sake of argument that the code was copyrightable, and found Google’s copying represented a fair use.  (Justice Barrett did not participate in the decision because she had not been present for oral argument.)

The Court reasoned that the fair use doctrine “can play an important role in determining the lawful scope of a computer program copyright” and “distinguish between expressive and functional features of computer code where those features are mixed.”  According to the Court, the fair use doctrine “can focus on the legitimate need to provide incentives to produce copyrighted material while examining the extent to which yet further protection creates unrelated or illegitimate harms in other markets or to the development of other products.”

Weighing the fair-use factors, the Court found in Google’s favor.  Google copied a relatively small amount of code, and Google’s use of the code was transformative.  The Court stated, “Google reimplemented a user interface, taking only what was needed to allow users to put their accrued talents to work in a new and transformative program.”  The Court also explained Google used the APIs to let Java programmers easily build Android apps, which is fundamentally a transformative use.  As a result, much of the value is from developers investing time to learn the system rather than from the actual program operation itself.  “Google copied only what was needed to allow programmers to work in a different computing environment without discarding a portion of a familiar programming language.  Google’s purpose was to create a different task-related system for a different computing environment (smartphone) and to create a platform – the Android platform – that would help achieve and popularize that objective.”

The Court expressed concern that given programmer’s investment to learn the Java API, allowing Oracle to enforce a copyright claim “would risk harm to the public” by essentially locking up the declaring code.  “Oracle alone would hold the key.”  “The result could well prove highly profitable to Oracle (or other firms holding a copyright in computer interfaces) … [but] the lock would interfere, not further, copyright’s basic creativity objectives.”  On the other hand, “[t]o the extent that Google used parts of the Sun Java API to create a new platform that could be readily used by programmers, its use was consistent with that creative ‘progress’ that is the basic constitutional objective of copyright itself.”

In dissent, Thomas and Alito argued the Court was wrong to skip the step of determining whether APIs are copyrightable because jumping to the fair-use analysis “distorts” the outcome.  The dissent further stated that “Oracle’s code at issue here is copyrightable, and Google’s use of that copyrighted code was anything but fair.”  However, the majority did not agree.

While the decision was narrowly limited to the APIs in this case and did not overturn or modify earlier fair-use cases, it will still have a significant impact on computer programmers and app developers.  However, the lack of a decision as to whether APIs are copyrightable means more battles are likely to follow.

The Ninth Circuit recently considered an issue of first impression: What standard of review does an appellate court apply when reviewing a district court’s grant of summary judgment in a trademark infringement case on the equitable basis of the unclean hands doctrine. The Ninth Circuit faced this issue in the case titled: Metal Jeans, Inc. v. Metal Sport, Inc. (decided Feb. 16, 2021).

In the Metal Jeans case, Gary Topolewski owned Metal Jeans and was the former owner of Topolewski America, Inc. (“TA”). He had been selling “METAL” branded clothing since the early 1990s, primarily through hard rock music magazines. He gradually expanded his offerings to a variety of markets, including motorcyclists, skaters, lumberjacks and “headbangers.”

In 1999, he registered the “METAL” mark on TA’s behalf for use on various clothing items, including jeans, shirts and boots. Six years later, Topolewski told the USPTO that TA had continuously used the METAL mark on these various items since 1999. This was apparently untrue and in a separate 2008 proceeding, the PTO concluded that this was a false statement, at least as to boots, and cancelled TA’s registration of the METAL mark. Topolewski almost immediately reapplied for the mark, this time through Metal Jeans, which obtained the “METAL” registration in 2013.

Metal Sport was started by a retired Finish power lifter and specializes in power lifting apparel, gear and accessories. The owner created a stylized “METAL” mark that he registered in August 2016 and used for power lifting apparel and gear that he marketed. He apparently drew and began using the stylized “METAL” mark sometime around 1997.

Metal Jeans sued Metal Sport for trademark infringement in 2015 claiming that the use of its stylized “METAL” mark created a likelihood of consumer confusion between the two marks. Both parties moved for summary judgment and the district court granted Metal Sport’s motion on the basis of the affirmative defense of unclean hands. Metal Jeans timely appealed to the Ninth Circuit.

The Ninth Circuit began by recognizing that normally a grant of summary judgment by a district court in a trademark infringement claim is reviewed “de novo with all reasonable inferences drawn in favor of the non-moving party.” The Ninth Circuit also recognized that grants of equitable relief, on the other hand, are generally reviewed under an abuse of discretion standard. The doctrine of unclean hands is based in equity and is a form of equitable relief. The Ninth Circuit noted that it had decided two prior cases involving summary judgment on the issue of unclean hands but neither decision addressed the specific standard of review that would apply.

The Ninth Circuit continued by noting that a number of cases had recognized the general principle that other equitable doctrines such as acquiescence and/or laches should be analyzed under an abuse of discretion standard. The Ninth Circuit reasoned that it was “a modest and obvious step to extend these previous holdings to the present situation,” i.e., to the application of the unclean hands doctrine. The Ninth Circuit concluded that “the appropriate standard of review of a district court’s determination to grant summary judgment on the affirmative defense of unclean hands is abuse of discretion.” The Ninth Circuit noted, however, that other aspects relating to the granting of summary judgment would continue to be reviewed under a de novo standard, such as “whether the district court inappropriately resolved any disputed material facts in reaching its decision.”

In a separate unpublished memorandum that it issued simultaneous with the opinion discussed above, the Ninth Circuit concluded that the district court had erred in granting summary judgment on the basis of unclean hands. In that memorandum, the Ninth Circuit recognized that, “to constitute unclean hands, a defendant must show (1) that the plaintiff’s conduct is inequitable and … (2) relates [directly] to the subject matter of its claims.’” The Ninth Circuit next reviewed the six examples of the alleged misconduct that the district court relied upon in finding that unclean hands should apply. These included: (1) Metal Jeans’ various accounts of how it acquired the mark; (2) Metal Jeans’ representation that it had owned the “METAL” mark at the time TA had in fact owned it; (3) Topolewski had apparently advised the PTO that Metal Jeans was a “premium denim lifestyle clothing brand,” which may not have been accurate; (4) Metal Jeans apparently sourced some of its products from China despite having a “American made, American worn” slogan; (5) Topolewski testified inconsistently as to how he had assigned the goodwill and trademarks between TA and Metal Jeans; and (6) Topolewski’s apparent false statement to the PTO that had led to the cancellation of the mark in 2008.

The Ninth Circuit continued by holding that the district court had improperly resolved several disputes of material fact as to the first five examples in the movant’s favor as opposed to the non-moving party. Furthermore, the Ninth Circuit held that five of the six examples did not “necessarily relate directly to the trademark claim Metal Jeans asserts in this case;” did not appear to cause any harm; and did not evidence any malintent by Metal Jeans. The Ninth Circuit noted that although a jury could later find that each of these examples did evidence unclean hands (as the district court found in ruling on summary judgment), the Ninth Circuit ruled that it was equally likely that the jury could reach other reasonable conclusions. Thus, the Ninth Circuit held that the district could had erred in grating summary judgment on the basis of unclean hands.

Parties litigating trademark claims need to remember in moving for summary judgment and subsequent appeals, which standard of review the appellate court may apply as to certain issues, especially as to equitable defenses.

The validity of a United States patent can be challenged in federal court litigation.  Patents can also be challenged in the U.S. Patent and Trademark Office, which, in most cases, is a quicker and less costly process.

The PTO provides three procedures by which a patent can be challenged: inter partes review (IPR), post grant review (PGR), and ex parte reexamination.  In IPRs and PGRs, the challenger and the patent owner both participate, and the proceedings are handled by the Patent Trial and Appeal Board (PTAB).  In an ex parte reexamination, the challenger is not involved after the request for reexamination has been filed, and the proceeding is handled by the PTO examiners.

In IPRs and PGRs, anyone except the patent owner may file a petition to challenge the patent.  The filing fees are high, $41,500 for an IPR and $47,500 for a PGR, with additional fees depending on the number of claims challenged.  The proceedings are handled by a three-judge panel of administrative judges with technical background in the field of the patent.  There are two phases in these proceedings.  The first phase consists of the filing of the petition by the challenger, the filing of a response by the patent owner, and the decision whether to institute the IPR or PGR by the PTAB.  If the PTAB institutes the IPR or PGR, then the second phase (the trial phase) begins.  The second phase consists of discovery (more limited than in litigation), briefing, an oral hearing, and a final written decision by the panel.  The entire process from institution to the final decision should take no more than 12 months.  The parties may appeal the decision to the Federal Circuit Court of Appeals.

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On March 16, 2021, U.S. Circuit Judge Evan J. Wallach for the Federal Circuit Court of Appeals announced he plans to take senior status on May 31, 2021.  This semi-retirement is set to create the first vacancy at the Federal Circuit in almost six years.  The Federal Circuit handles all appeals of patent cases from Districts Courts in the U.S., and appeals from various government agencies.  Thus, the Federal Circuit is the only one of the thirteen federal courts of appeal whose jurisdiction is determined entirely on the subject of the lawsuit it hears, rather than on the geographical location from which the appeal originated.  This means the Federal Circuit can hear appeals from every District Court in the United States as long as it has subject matter jurisdiction. The only court in the United States with more authority over patent related issues in the United States Supreme Court.

The Federal Circuit was the only federal court of appeals that did not have any vacancies during President Donald Trump’s administration.  In fact, President Trump nominated and succeeded in putting a judge in every other appellate court during his four years in office, including fifty-four judges on the federal appeals bench.  However, the Federal Circuit remained untouched, and in fact currently has eight Democratic-President appointed judges, and four Republican-President appointed Judges.

Judge Wallach was confirmed in November 2011 after being nominated by President Obama, and will take senior status after spending nearly a decade at the Federal Circuit.  Senior status is a form of semi-retirement that allows judges to vacate their seats on the bench but keep working with the option of reducing their caseload.  Judge Wallach had previously served a 16-year stint as a judge in the U.S. Court of International Trade.

Some of Judge Wallach’s more well-known recent opinions include Phigenix, Inc. v. Immunogen, Inc. in 2017 that expanded the bar on competitor standing to appeal decisions from the Patent Trial and Appeal Board, and, Blackbird Tech LLC v. Health in Motion LLC, et al. in 2019 that expanded the ability of the winning side in patent litigation to recoup legal costs in exceptional cases by citing the number of patent lawsuits brought by the plaintiff (110 cases in a four-year period in the case of Blackbird).

Now, President Biden will have an opportunity to appoint a judge to the Federal Circuit for the first time in six years, and an opportunity to make an impact on the courts and the future of patent law in the United States.

We recently discussed a new trend in celebrity copyright litigation on our YouTube channel and podcast (The Briefing on YouTube). Specifically, we discussed celebrities taking a stand and defending copyright claims brought by photographers against celebrities who reposted photos on their social media accounts. Two specific celebs who have taken a stand are Emily Ratajkowski and LeBron James. I am writing today to discuss what may be a new strategy in such copyright litigation. That strategy is defaulting.

When a party is sued in federal court—the exclusive jurisdiction for copyright actions—they have 21 days from the date of service to file a responsive pleading under Federal Rule of Civil Procedure 12(a)(1)(B). If a defendant fails to file a response, the plaintiff can apply to the court for entry of default under Federal Rule of Civil Procedure 55(a). Unless the defendant files an untimely response, the court will likely enter the defendant’s default. Once that occurs, the defendant is deemed to have admitted the well-pleaded allegations of the complaint. The plaintiff can then apply to the court for entry of default judgment. In doing so, the plaintiff requests that the default judgment include all damages that the plaintiff claims to have incurred, attorney’s fees (if applicable), and costs. Of course, the plaintiff has to provide factual and legal support for the damages request. Obviously this isn’t an ideal situation for a defendant given that the plaintiff gets to provide uncontested evidence to the court to support its damages claim while the defendant is deemed liable due to the entry of default. If you ask most attorneys, they would tell you that defaulting is never advisable, unless perhaps you’re judgment proof. But a recent ruling from the United States District Court for the Southern District of New York may cause some attorneys to rethink things.

In the matter of Clint Brewer v. Sofia Vergara Enterprises, Inc. and Sofia Vergara (collectively, “Vergara”) (Docket No. 1:20-cv-4865-AKH), a photographer who licensed a photo that he took of Vergara walking onto the set of America’s Got Talent sued Vergara for copyright infringement after she reposted the photograph on her Instagram account to her 21.2 million followers. Brewer hired the infamous copyright troll Richard Liebowitz, who has been repeatedly sanctioned by the federal courts for filing frivolous litigation and who was recently suspended from practicing law in New York, pending a disciplinary investigation. In short, Brewer claimed that Vergara published his copyright-protected photograph to promote her clothing brand—which she arguably did since she tagged Wal Mart and mentioned her clothing line in the caption. Brewer’s prayer for relief included a claim for $150,000 in statutory damages under the Copyright Act and additional damages under the Digital Millennium Copyright Act for removing the copyright notice. Despite a significant request for damages, Vergara never responded to the complaint. It’s unclear whether this was intentional, but presumably it was given Vergara’s familiarity with litigation.

As a result of Vergara’s failure to respond, the Court entered her default, and Brewer subsequently moved the court for a default judgment. Although Brewer alleged that he was seeking up to $150,000 in statutory damages, his motion only sought $5,000 in statutory damages, $455 in attorney’s fees, and $440 in costs. In determining statutory damages, the court has great discretion to award between $750 and $150,000 per work, depending on whether the infringement was willful.

On February 18, 2021, the court issued its order and entered default judgment. The court exercised its discretion and awarded a mere $750 in statutory damages for the copyright infringement claim and refused to award attorney’s fees and costs. Given the amount in controversy for a violation of the Copyright Act, this is a great outcome, and it’s exponentially better when you consider that Vergara didn’t spend a dime in attorney’s fees or costs, which easily could have exceeded six figures if the matter were contested.

While this was a fantastic outcome for Vergara, I can’t say that I’ll be inclined to suggest to my clients that they simply default in such cases. The risk of doing so is far too great. Sure, the court in the Vergara case found that her conduct wasn’t willful, awarded the statutory minimum in damages, and refused to award attorney’s fees and costs. But it was also possible that a judge could have deemed her conduct willful and awarded the statutory maximum of $150,000 and attorney’s fees and costs. In this instance, the gamble paid off, and I will unquestionably inform my clients of this outcome, but I will not be the one to recommend the default strategy. If a client chooses to roll the dice after being provided with a thorough explanation of the possible outcomes, that is their prerogative. But flatly recommending such a course of action seems imprudent.

While Shakespeare may have wondered “what is in a name?”, the executives at Peloton believe that the trademark SPIN is of great importance. Last month (February, 2021), Peloton filed petitions to cancel the trademarks SPIN and SPINNING for physical fitness instruction and for stationary exercise bicycles on the grounds that the marks are generic. Mad Dogg Athletics, located in Venice, CA, is the owner of the trademarks SPIN and SPINNING. Mad Dogg registered SPIN on the principal register in 1998 and SPINNING in 1993. In its petition, Peloton asserted that Spin classes and spin bikes are part of the fitness lexicon and that Mad Dogg’s trademarks for SPIN and SPINNING have become generic. Peloton cited to Internet evidence, including memes, to support its argument that the terms SPIN and SPINNING have become generic.

It is a serious issue for a trademark owner if their trademark becomes generic.  Generic terms are terms that the relevant purchasing public understands primarily as the common or class name for the goods or services. Put in common parlance, if the general public primarily understands the word to designate the product rather than the producer, the word is generic. Generic terms are incapable of functioning as registrable trademarks denoting source, and are not registrable on the Supplemental Register or on the Principal Register after having acquired secondary meaning.

There is a two-part test used to determine whether a designation is generic: (1) What is the class of goods or services at issue? and (2) Does the relevant public understand the designation primarily to refer to that class of goods or services? The test turns upon the primary significance that the term would have to the relevant public.

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©2021. Published in Landslide, Vol. 13, No. 3, January/February 2021, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

The U.S. Supreme Court issued numerous landmark decisions in 2020, among those—for trademark scholars and practitioners—Romag Fasteners, Inc. v. Fossil, Inc.¹ The Court, with Justice Gorsuch delivering the majority opinion, held that a plaintiff in a trademark infringement suit is not required to show that a defendant willfully infringed the plaintiff’s trademark as a precondition to a profits award. But Justice Gorsuch’s opinion and Justice Alito’s and Justice Sotomayor’s concurrences were clear that mental state is still a highly important consideration in determining whether to award profits. To that end, even with the Romag decision clarifying that willfulness is not a precondition for a profits award in a trademark infringement suit, the lower courts are likely to still require plaintiffs to prove that defendants had high levels of culpability before awarding profits for trademark infringement. Practitioners should expect that juries will find that defendants who knew of infringement or were reckless concerning the possibility of such conduct deserve to lose their profits.

Romag solidifies the threat posed to companies that rely on third-party manufacturers. By allowing a profits award when infringement is perpetrated with a mental state less than willfulness, this decision incentivizes companies using Chinese and other foreign manufacturers to innovate in order to mitigate these risks, either by strengthening supply chain oversight or (more likely) by writing contracts to control the risk as much as possible. Considering the importance of Chinese manufacturing to global trade, the Chinese legal system and its evolving trademark enforcement system will likely cause companies to get creative.

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A recent case in the Southern District of New York calls into serious question the ubiquitous practice of embedding photographs on a content creator’s website.

An embedded photo is one that is not hosted on the website’s own server, but instead is linked to a third-party server like a social media site.  Instead of the photo being permanently available on the website, the website pulls the photo from the third-party site live when the website is accessed by a user.  Platforms like Twitter, Instagram, and TikTok make it extremely easy for websites to embed user posts, and provide website designers with tools specifically meant to make embedding seamless for the user.

In a recent case (Sinclair v. Ziff Davis, LLC, 1:18-cv-00790, S.D.N.Y.), a professional photographer posted a photo to Instagram that was later embedded by Mashable in an article on its website.  In its original ruling, the court held that Instagram’s terms of service (which every user, including Sinclair, accepts when signing up) permitted the embedding on links on third party websites.  The court ruled that Instagram had the right to relicense Sinclair’s image to Mashable, and granted Mashable a dismissal of Sinclair’s claims.

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