Recently, Eagles Ltd. (the “Eagles”), the entity in control of legendary rock band The Eagles’ business affairs, filed a lawsuit against Hotel California Baja, LLC for trademark infringement. While I’m sure most of us are familiar with the Eagles’ song Hotel California, it may come as a surprise to most trademark aficionados that the Eagles have never registered HOTEL CALIFORNIA with the USPTO. Although this is shocking, and many intellectual property practitioners might even say reckless, those reactions beg the question: Is federal registration an absolute necessity to enforcement?

Federal registration is undoubtedly beneficial, and most practitioners would advise registration as the prudent course of action, but it is by no means an absolute necessity. The Lanham Act is protective of all trademarks that a proponent can establish having used in the United States, whether registered or not. While I wouldn’t personally advise my clients to proceed without a registration, as there is significant downside, this should come as relief to some entrepreneurs, particularly start-ups, who may not quite have the revenue needed to pursue trademark registration for their marks. But such an election should not be made without first consulting competent counsel to obtain a complete understanding of the disadvantages of proceeding with an unregistered trademark. For example, one such disadvantage is that unregistered trademarks are geographically restricted to the area where the mark is utilized. After all, we don’t all have national and international distribution like the Eagles, giving rise to trademark protection that is equally broad in scope.

In any event, the Eagles have filed their lawsuit in the United States District Court for the Central District of California, which is based in Los Angeles. Interestingly enough, the Hotel California Baja is based, as its name implies, in Baja California, Mexico. Although this could seemingly pose a jurisdictional problem, the Hotel California Baja is a registered California corporation, which, in this instance, makes it subject to the Central District’s jurisdiction. In the lawsuit, the Eagles allege that the Hotel California Baja has engaged in unfair competition and created a false designation of origin to consumers. More specifically, the Eagles allege that through the use of HOTEL CALIFORNIA, the playing of the Eagles’ music in the lobby, and the sale of merchandise self-proclaiming the hotel as “legendary,”[1] the Hotel California Baja has duped consumers into believing that the hotel is somehow associated or otherwise affiliated with the Eagles, or alternatively, that the Eagles sponsor or approve of the hotel’s services and commercial activity. Furthermore, the Eagles have alleged that the Hotel California Baja falsely claims to have served as inspiration for the song. As you might assume from the filing of this action, the Eagles have no such relationship with the Hotel California Baja, and they do not sponsor or approve its activities.

It is also worth noting that there is related litigation pending before the USPTO. Namely, in October 2016, the Eagles opposed the Hotel California Baja’s trademark registration, which was filed in November 2015, on the ground that it creates a likelihood of consumer confusion. Interestingly enough, shortly thereafter, the Eagles finally attempted to register HOTEL CALIFORNIA with the USPTO, but the examining attorney issued an office action refusing registration on the basis of Hotel California Baja’s previously filed application! However, in light of the recently filed federal litigation, both of these matters will likely be stayed.

It will be interesting to see how this dispute is ultimately resolved, whether through settlement or litigation. At this juncture, we do not have enough information to provide an informed analysis of how we believe it may come out, but we will keep an eye on the docket and provide updates when meaningful information becomes available.

[1] The Eagles contend that if the Hotel California is legendary, there can only be one source for that status: the Eagles. Thus, the Eagles contend that this characterization of the Hotel California Baja further exemplifies the false designation of origin.

 

The Copyright Act provides that “Registration” of a copyright is a precondition to filing suit for copyright infringement.  17 U.S.C. § 411(a).  We are still trying to figure out exactly when registration occurs.

While copyright registration is voluntary, the Copyright Act provides several incentives for a copyright owner to register a copyright, one of which is the right to enforce a copyright in an infringement action:  17 USC 411(a) provides:

[N]o civil action for infringement of the copyright in any United States work shall be instituted until … registration of the copyright claim has been made in accordance with this title.  In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement .…”

There are two camps of thought splitting the Federal circuit courts on when “registration” takes place with regard to Section 411(a).  The first is that “registration” occurs when a copyright owner files all necessary application materials to the Copyright Office to register a copyright.  The 5th and 9th Circuits and various district courts in other circuits have adopted this perspective, relying on the fact that the Copyright Act prescribes that the effective date of a registration is the date on which a proper and complete application was filed.  Because an applicant may sue for infringement whether or not a registration is issued as long as a proper application was filed, courts following the application approach believe the “registration” approach is misguided.  Since an applicant can file suit either way, it is immaterial whether registration is ultimately granted. Scott Hervey 10 final

The second camp is that “registration” occurs when the Register of Copyrights registers the copyright or rejects the application.  The 10th Circuit follows the “registration“ approach.  Just this month, the 11th Circuit made clear that it too will follow the registration approach.

In its decision in Fourth Estate v. Wall Street.com, LLC, the 11th Circuit explained the rationale behind its support of the “registration” approach.  That case involved a copyright infringement lawsuit over articles appearing on WallStreet.com.  The Copyright Office had not yet processed the copyright applications and Wall-Street.com, LLC moved to dismiss.  The court stated that “the Copyright Act defines registration in Section 410(a) as a process that requires action by both the copyright owner and the Copyright Office; the filing of the application, the payment of the application fee, the examination of the application by the Register of Copyrights, and then either the issuance of the certificate of the notification of the refusal of registration.

Section 410(a) of the Copyright Act provides in pertinent part:

When, after examination, the Register of Copyrights determines that, in accordance with the provisions of this title, the material deposited constitutes copyrightable subject matter and that the other legal and formal requirements of this title have been met, the Register shall register the claim and issue to the applicant a certificate of registration under the seal of the Copyright Office.

The court argued that the use of the phrase “after examination” in section 410(a) makes explicit that an application alone is insufficient for registration.  Further, the court points out that Section 411(a) allows an applicant whose application has been refused to file an infringement suit.  If registration occurred as soon as an application was filed, how could the application ever be refused the court reasoned.

With two Federal circuits clearly split, it is time for the Supreme Court to resolve this issue.

For over 25 years, the Court of Appeals for the Federal Circuit and the United States district courts have interpreted the patent venue statute 28 U.S.C. §1400(b) to allow plaintiffs to bring patent infringement cases against a corporation in any district court where there is personal jurisdiction over that corporate defendant.  The U.S. Supreme Court just overturned that interpretation in TC Heartland v. Kraft Foods.  In some instances, TC Heartland will greatly limit where patent infringement cases can be filed.  In fact, some are predicting that a significant number of the cases filed in the plaintiff-friendly Eastern District of Texas will be dismissed or transferred and that a substantially smaller number of cases can be filed there in the future.

The patent venue statute 28 U.S.C. §1400(b) provides that “[a]ny civil action for patent infringement may be brought in” either “the judicial district where the defendant resides” or “where the defendant has committed acts of infringement and has a regular and established place of business.”  When the defendant is a corporation, the question arises as to where does the corporation reside?  In Fourco Glass Co. v. Transmirra Products Corp., the Supreme Court previously ruled that for purposes of the patent venue statute “a domestic corporation ‘resides’ only in its State of incorporation.” In Fourco, the Court rejected the argument that §1400(b) is subject to the broader definition of corporate ‘residence’ found in the general venue statute, 38 U.S.C. §1391(c).   However, §1391 has been amended twice since the ruling in Fourco.  As amended, §1391 provides that for purposes of venue, a defendant corporation resides in any judicial district where the corporation is subject to personal jurisdiction.

In 1990, the Federal Circuit concluded in VE Holding Corp. v. Johnson Gas Applicance Co. that §1391(c), as amended in 1988, applies to §1400(b) and redefines the meaning of “resides” in §1400(b) to mean that a defendant corporation resides in any judicial district in which it is subject to personal jurisdiction rather than just in its state of incorporation. In 2011, §1391 was amended again to clarify that the statute applies, “[e]xcept as otherwise provided by law,” to “venue of all civil actions brought in district courts of the United States.”  But in its ruling below, the Federal Circuit reaffirmed VE Holding, finding no basis for a change in interpretation after the 2011 amendment.  The Supreme Court just reversed.Jo-Dale-Carothers-015_web

Now, for patent cases, a plaintiff will need to show that a particular district court has personal jurisdiction over a corporate defendant and separately show that venue is proper in that district.  To show that venue is proper, the plaintiff will have to show that

  • the district court is in the defendant’s state of incorporation or
  • the defendant has committed acts of infringement in the judicial district and has a regular and established place of business in that district.

The impact of this ruling will likely be felt greatest in plaintiff-friendly jurisdictions, such as the Eastern District of Texas where approximately 38% of all patent cases were filed in 2016 and where approximately 45% of all patent cases were filed in 2015.  Of those cases, the Eastern District of Texas would be a proper venue for only a small fraction of those cases today in light of the Supreme Court’s ruling.  In fact, we can expect to see a large number of motions to dismiss or transfer pending cases where venue has not yet been waived.  We are also likely to see a rise in filings in jurisdictions, such as Delaware, where many companies are incorporated.

Another impact of this ruling is that a plaintiff seeking to enforce patents against multiple defendants will likely need to file lawsuits in multiple districts rather than be able to bring all of the defendants to a single venue.  There are pros and cons to this effect.  Plaintiffs likely will give even more careful consideration to the merits of their claims before filing suit, given that the cost of litigating in multiple locales will be higher than litigating in a single venue.  Defendants may feel more emboldened to fight, rather than settle, claims they feel are unmeritorious if the venue is more favorable to them.

But where do foreign corporations reside?  Consider a foreign corporation doing business in the United States, such as over the Internet.  What if it does not have a place of business in the United States?  Where does that foreign corporation reside for purposes of venue?  We will have to leave that question for another day.  This ruling only clarified where domestic corporations reside.

“I googled it …” has become ubiquitous in every day conversation. Many of us refer to “googling” as the act of searching the internet regardless of whether we use the Google search engine to do so.  But has our everyday use of the verb “googling” rendered the Google trademark unprotectable?  “Nope,” said the Ninth Circuit in the recent case of Elliott v. Google, Inc., decided May 16, 2017.

In early 2012, one of the Plaintiffs registered more than 750 domain names using the word “Google” to describe various brands and things such as “googledisney.com” and “googleborackobama.net.”  After Google objected, the National Arbitration Forum agreed that these domain names were confusingly similar to the GOOGLE trademark and were registered in bad faith.  It transferred the domain names to Google.  Plaintiffs then filed a lawsuit seeking to cancel the GOOGLE trademark under the Lanham Act.  Plaintiffs argued that because the word “google” had become universally understood to describe the act of internet searching, it had become “generic” and was no longer subject to trademark protection. The U.S. District Court in Arizona rejected this claim and granted summary judgment in Google’s favor. Plaintiffs appealed to the Ninth Circuit.

The Court began by recognizing that generic terms are “common descriptive” names, which people use to describe a particular type of good or services. Because generic terms do not identify the “source of the product” they are generally not protectable under trademark law.  The Court continued by recognizing that over time, brands could become the victim of “genericide,” that is, “when the public appropriates a trademark and uses it as a generic name for particular types of goods or services irrespective of its source.”  The Court provided as examples aspirin, cellophane and thermos as once protected trademarks that had lost their trademark protection over time as the public became accustomed to using these terms in connection with describing a type of product, regardless of who made the product.

However, the Ninth Circuit cautioned that “the mere fact that the public sometimes uses a trademark as a name for a unique product does not immediately render the mark generic … Instead, a trademark only becomes generic when the `primary significance of the registered mark to the relevant public’ is as the name for a particular type of good or service irrespective of its source.”  The Ninth Circuit described this analysis as the who/what test, i.e., whether the relevant public understands a mark as describing the “who” as the maker or provider of a good or service as opposed to whether it understands the mark as the “what” in describing the good or service regardless of who makes or provides it.

In rejecting the Plaintiffs’ claims, the Ninth Circuit began by clarifying that a claim of “genericness” must be made with regard to a particular type of good or service.  In doing so, it rejected Plaintiff’s claim that because “googling” had been commonly used to describe an act, i.e., an internet search, the District Court erred when it limited its inquiry as to internet search engines.  The Ninth Circuit found that this was proper because any claim of genericness must be made in relation to a good or service given the clear language of the Lanham Act.  The Ninth Circuit continued by recognizing that the failure to limit the inquiry to a particular good or service would put at risk those trademarks that were “arbitrary,” i.e., where an existing word is used to identify the source of a good with which it would otherwise have no logical relationship.  For instance, “IVORY” is subject to trademark protection when used in connection with the particular brand of soap, but would otherwise be subject to cancellation for genericness if “IVORY” was used in connection with products made from elephant tusks.James Kachmar 08_web

Next, the Ninth Circuit turned to the Plaintiffs’ argument that because the public has used “googling” as a verb, it was no longer subject to protection.  The Ninth Circuit rejected this argument, finding that the use of an otherwise protected mark as a verb does not automatically render it generic.  The Court concluded that Congress, in amending the Lanham Act, specifically acknowledged that a protected mark may be used as both the name for a product, i.e., as a noun, and yet also used with a specific source in mind, i.e., an adjective.  The Ninth Circuit cited a prior case involving Coca-Cola’s trademarks in which it rejected a claim that customers ordering a “coke” were not necessarily referring to a Coca-Cola product.

The Ninth Circuit spoke approvingly of the District Court’s analysis in this regard by referring to both “discriminate verbs” and “indiscriminate verbs” in order to evaluate Plaintiffs’ claims.  The Court had reasoned that a speaker might use “google” in both an indiscriminate sense, i.e., using “googling” to refer to an internet search without regard to the search engine, as well as other times using it in the determinate sense, i.e., using “Google” meaning to search the internet using the Google search engine.  The Ninth Circuit concluded that the District Court properly found that the primary significance of the word “Google” was whether the relevant public related it to the specific search engine as opposed to the more of the generic internet searching term.

In conducting this inquiry, the Ninth Circuit found that the lower court properly concluded that Plaintiff had not met his burden of establishing the genericness of Google.  The Court noted that the Plaintiffs’ bore the burden of proving genericide by a preponderance of the evidence because they were the ones seeking cancellation of the GOOGLE trademark.  Thus, they were required “to identify sufficient evidence to support a jury finding that the primary significance of the word ‘google’ to the relevant public is as a name for internet search engines generally and not as a mark identifying the google search engine in particular.” Here, the lower court had rejected two of the three surveys conducted by Plaintiffs as being unreliable.  The District Court did accept a third survey, which used but was described as the “thermos” study in which a survey respondent was asked: “If you were going to ask a friend to search for something on the internet, what word or phrase would you use to tell him/her what you want him/her to do?” more than half the respondents used the term “google.”  The Court concluded, however, that this evidence did not go any further other than allowing a favorable inference to be drawn that google had both a determinate and indeterminate use.

Plaintiffs attempted to offer evidence concerning dictionary definitions of the term “google” but the Court again found this evidence insufficient given that the definitions referred to both the Google search engine and did nothing more than support the favorable inference already drawn by the District Court.

Finally, Plaintiffs argued that there was no other term to be used to describe the act of “googling,” which was rejected by the Court.  The Ninth Circuit rejected this finding that not a single competitor of Google’s referred to their search engine as “a google.” In short, the Ninth Circuit found that most of the evidence submitted by Plaintiffs to avoid summary judgment was irrelevant to the primary inquiry and affirmed the lower court’s granting of summary judgment in Google’s favor.

For now, it appears that Google’s trademark is safe.  However, give it time and how the public comes to view the term “google,” a court could revisit this issue in the future.

 

James Kachmar is a shareholder in Weintraub Tobin Chediak Coleman Grodin’s litigation section.  He represents corporate and individual clients in both state and federal courts in various business litigation matters, including trade secret misappropriation, unfair business competition, stockholder disputes, and intellectual property disputes.  For additional articles on intellectual property issues, please visit Weintraub’s law blog at www.theiplawblog.com. 

*This line is the title of a song written by Peter Allen and Carole Bayer Sager that was performed in Bob Fosse’s movie “All that Jazz.”  The song was a hit, and the phrase has a lot of relevance to everyday life, but the Federal Circuit isn’t buying it.Audrey-Millemann-03_web

In RecogniCorp, LLC v. Nintendo Co. (Fed. Cir. 2017) 2017 U.S. App. LEXIS 7528, the Federal Circuit struck down a patent on the grounds that the invention was not new – it had been done before – way before– in 1775 by Paul Revere.

RecogniCorp’s patent covered a method and apparatus for encoding and decoding image data.  The invention was intended to solve problems that arise in the digital transmission of images, including decreased image quality as the images are compressed and transmitted.

RecogniCorp sued Nintendo for patent infringement.  The case was transferred to the Western District of Washington and stayed pending reexamination by the Patent and Trademark Office.  After the reexamination concluded, the district court lifted the stay.  Nintendo then moved for judgment on the pleadings, arguing that the patent’s claims were directed to ineligible subject matter under 35 U.S.C. §101.  Under that statute and case law, just about every type of invention can be patented, except for those that relate to laws of nature, natural phenomena, and abstract ideas.  Nintendo argued that RecogniCorp’s invention was an abstract idea, and therefore unpatentable.

The district court granted Nintendo’s motion, finding the claims to be directed to ineligible subject matter as an abstract idea.

On appeal, the Federal Circuit affirmed the district court’s decision.  The court applied the Supreme Court’s two-part test set forth in Alice Corp. v. CLS Bank International, 134 S.Ct. 2347 (2014) for determining whether a claimed invention is patent-eligible.  In applying the first step of the Alice test, the court determined that RecogniCorp’s claims were directed to an abstract idea.  The method of encoding and decoding images was a standard method, which the Court said had been used before, in Morse code, in ordering fast food at restaurants using a number system, and in Paul Revere’s famous phase “one if by sea, two if by land.”  The methods of RecogniCorp’s invention rely on encoding something at one end and decoding it at the other end, which is a concept or idea that has been used in many different situations.

Next, the Court applied Alice’s second step to decide whether there was an inventive concept that transformed the claim into a patent-eligible application.  The court said that nothing in RecogniCorp’s claims transformed the abstract idea into subject matter that was patent-eligible.  Because the claims failed both prongs of the Alice test, the court held that the claims were not patentable subject matter.

As most people know, Paul Revere was a Patriot during the American Revolution who is best known for warning the colonial militias that the British were getting ready to attack, before the battles at Lexington and Concord.  He helped create an intelligence and watch operation by the colonists over the British.  On April 18, 1775, Paul Revere was told that the British were leaving Boston for Cambridge by boat, heading on to Lexington and Concord, to seize the Patriots’ weapons at Concord and to capture their leaders Samuel Adams and John Hancock.  Revere had previously told the church’s sexton to alert the colonists to the British by signal using the lanterns in the church’s steeple:  “one if by land, two if by sea.”  On that night, Revere told the sexton to light two lanterns in the steeple.  Revere then quietly rowed a boat past a British warship to get to Charleston, and then rode by horseback into Lexington, spreading the warning as he went.  More riders joined him in the night, riding out through the countryside in a system the colonists called “alarm and muster.”  Revere was captured by the British (but later released, although they kept his horse).

Paul Revere helped stop the British in 1775, and, 242 years later, helped stop RecogniCorp’s patent.

For more information about Audrey, her practice, or the firm, please visit our website here: http://www.weintraub.com.