Saturday, February 27, 2016

Cybersquatting by Website Designer

Cybersquatting by a website designer is seldom a thought of concern by potential clients who are in the midst of working or are considering the work of a website designer for their start up a business.  Terms are rarely dickered with to ensure the handling of the domain selection and eventful registration.  When an unauthorized individual obtains control of a domain a business may be jeopardized.  Holders of domains by virtue of them having registered them in their names, run the risk of being deemed cybersquatters.
The ACPA, known as Anticybersquatting Consumer Protection Act was promulgated to address domain names being registered using a trademark.  The ACPA was addressing as well the potential for consumer confusion created by these domains and the harmful effect on the original business owner.  The ACPA seeks to prevent the divergence of business away from the original owner.  Any person registering a domain that is identical or confusingly similar to another individual’s or company’s trademark for commercial gain purposes is liable under the ACPA.
In Jysk Bed’N Linen, Inc. v. Monosij Dutta-Roy, the U.S. District Court for the Northern District of Georgia granted Jysk Bed’N Linen an injunction that required the defendant to transfer the domain names he had registered in his own name to the Jysk Bed’N Linen.   Jysk Bed’N Linen’s motion for summary judgment was also granted by the District Court on defendant’s counterclaims.  Before the 11th Circuit Court of Appeals was the appeals by the defendant of the District Court decisions under pursuant to 28 U.S.C. § 1291.
The 11th Circuit determined that there were items pending for the District Court to resolve and that it did not have jurisdiction over Jysk’s claims brought against defendant pursuant to  §§ 43(a) and (c) of the Lanham Act, 15 U.S.C. §§ 1125(a) and (c), and pertinent state law.   However, the 11th Circuit did rule on where it had jurisdiction regarding the review of the District Court’s injunction pursuant to 28 U.S.C. § 1292(a)(1) imposed on the defendant.  After the 11th Circuit analyzed the evidence before it in light of the 4 factors for determining the merits of an injunction, the Court affirmed the injunction rule by the District Court.  The Court found that the defendant abused its discretion, the plaintiff had a strong likelihood of success on the merits, without the injunction the plaintiff’s business would be irreparably harmed, little to no harm would be incurred by the defendant, and the public interest would be negatively affected without the injunction.

The lesson that should be adhered to is to confirm actual ownership of the domain upon registry.  By course of business events involving matters unrelated to domain ownership, plaintiff learned that it did not own its domain.  It also learned that its domain “bydesignfurniture.com” had expired.  Its website was operational.  The plaintiff also learned that defendant had registered three other domains using the plaintiff’s mark ‘BY DESIGN.’  These events are obviously unsettling to any business that is beginning in its first three to five years of operation, where establishing a brand is so important along with customer recognition.  At any levels of business duration, the sanctity of a business’ domain and trademark is crucial to stay competitive.  The last course of events that any business needs or anticipates is for a contractor to abscond with its intellectual property.

*Jysk Bed’N Linen, Inc. v. Monosij Dutta-Roy, Case No. 13-15309 (11th Cir., Dec. 16, 2015).

Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
Copyright 2016, all rights reserved Lorenzo Law Firm, P.A.

Thursday, February 25, 2016

Right of Publicity

Publicity of one’s identity without permission frequently happens to sports figures, actors, and to possibly world record holders, including Hacky Sack world, records holders.  The latter persona is the type actually who filed a district court action in Illinois claiming invasion of privacy and false advertising.  As argued, a commercial ran showing that an individual accomplished a series of fantastic feats including the breaking of the Hacky Sack world record all done attributed to consuming an energy drink.
The plaintiff sued the company that ran the commercial asserting a violation of the State of Illinois Right of Publicity Act.  Similar acts at the state level span the country.  Invasion privacy is typically argued and in similar scenarios, false advertising as well as citing the Lanham Act.  The plaintiff in Martin v. Living Essentials, did just that, noting his annoyance that the commercial gave the impression that an energy drink enabled someone to break his Hacky Sack record.  He noted also that his feat was after countless hours and days to prepare to achieve such a record.  Foremost, he noted that his identity was used for the commercial without his permission.
Aside for the defendant filing a motion to dismiss arguing that the action was time-barred, the court before rendering its decision to grant the motion to dismiss, it, more importantly, addressed the reasons for it to be with prejudice.  It took judicial notice of the notations at the bottom of the commercial which stated a disclaimer to the effect that the commercial was disclaiming any representation of it being true events and that the performances were for comedic purposes.  The Court determined that the allegations in the context of the commercial along with the disclaimers and the statement of purpose for comedic effect rendered the plaintiff’s allegation unconvincing.[1]  Furthermore, the disclaimer was explicit in its statement of “Not proven to improve physical performance, dexterity or endurance”, and the court acknowledged it as a crucial element in its determination.
The plaintiff also argued that he was identified by means of the commercial referring to the Hacky Sack work record holder displayed an individual playing Hacky Sack who broke the Hacky Sack record by drinking the advertised energy drink.  While the defendant asserts that the plaintiff’s name was never used or his likeness or voice used, the plaintiff argues that the phrase “the record of Hacky Sack” identified him.  He also argues that the Right of Publicity Act covers “any attribute of an individual.”  The court deemed this to be too ambiguous to conclude that the plaintiff’s identity was used.   The court in this vein importantly noted that the commercial had not used the plaintiff’s identity which rendered him unable to pursue a false advertising claim.[2]  The court determined that the plaintiff did not have the necessary commercial interests to assert. For these reasons, it was dismissed with prejudice.
[1] See Schering–Plough Healthcare Prods. v. Schwarz Pharma, Inc., 586 F.3d 500, 513 (7th Cir. 2009).
[2] See Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014). “to come within the zone of interests in a suit for false advertising under § 1125(a), a plaintiff must allege an injury to a commercial interest in reputation or sales.”

Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
Copyright 2016, all rights reserved Lorenzo Law Firm, P.A.

Tuesday, February 23, 2016

Digital Assets Recognized by States - Florida Follows

Digital assets come in many ways but seldom fathomed to have any import until a loved one passes.  Our lives are increasingly absorbed by the amount of time spent in cyberspace on cellphones, tablets, computers, and participating in social platforms sharing our lives, including thoughts, photos, and experiences which soon become memories for you and for those you leave behind, yet leaving a digital footprint naked to the eye.  That digital footprint encompasses banking transactions, electronic communications for personal and professional uses, as well for financial interests and investments. We as well store photos, documents, records, wills, trusts physically in a file or bank safe deposit box. While the latter can be retrieved by instruction in a will or trust by a trusted assigned loved one, the former having a digital makeup is not so easily retrievable.  These scenarios have led states to enact fiduciary provisions to follow the Fiduciary Access to Digital Access Act of 2015 (FADAA).[1]
The difficult thus far has been that a digital asset is not easy to define for the sake of valuing.  Digital assets are also not static in nature as technology evolves before our eyes in complexity and reach into our lives, business, and government and its services. Our digital footprint gets more complicated by definition as we include the breaches in our security and services we receive via digital means, i.e., retirement accounts, insurance policies, professional associations, licenses, and accounting.  In 2011- 2012 only 5 states, Idaho, Rhode Island, Nebraska, and Connecticut were embarking on this issue of enhancing the authority of the personal representative to access certain types of deceased digital assets, followed by Indiana.  Indiana’s approach was broad and novel in that it requires the custodian of the electronic information of the deceased to provide it to the deceased’s representative.
Oregon followed in 2013 and was the first to coin the phrase “digital assets” in a legal reference in its statute.    All along the Uniform Law Commission that works on probate provisions among the states for comprising uniform provisions proceeded to organize the effort to among states to promulgate on the appropriate handling of digital assets at one’s passing. In early 2013, the first draft of the FADAA was issued for states to review and for a minimum of twenty to approve the Act.
Now in 2016, twenty states have introduced bills in their respective legislatures on their Fiduciary Access to Digital Assets Act.  Along with this group is Florida introducing Florida Fiduciary Access to Digital Assets Act (FFADAA) as its version.[2]  The purpose of the uniformity movement in this regard is to enhance the ability for executors, of a decedent’s estate, trustees, agents under a power of attorney, and conservators, to as well managing the intangible digital assets left behind.  With this in place, trusted assigned individuals by the deceased can then address the complexities of the decedent’s estate which should appropriately include the digital realm of the decedent’s life.
These authorized individuals will now have to address a laundry list of “aspects”, not just documents, where the decedent interacted; provided appropriate instructions and authorization is explicitly described in either a will, trust, or power of attorney, e.g., website URLs, files housed in hardware, virtual currency, electronic communications, and social accounts.  As this author has previously posted on digital assets and digital legacy, more is to come on this subject embracing notions about administration, definition, liabilities, and service providers.
[1] Fiduciary Access to Digital Assets Act (Draft 2013).
[2] 2016 Florida Legislature, HB747/SB 494 FFADAA.


Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
Copyright 2016, all rights reserved Lorenzo Law Firm, P.A.

Monday, February 22, 2016

Privacy Issue of FCC over ISPs

Privacy is a late to-come-by issue of the Federal Communications Commission (FCC) as Internet Service Providers (ISP) were reclassified.  As part of the push for net neutrality, ISPs were soon to be treated as common carriers by the FCC.  This has left the door open for broadband providers to access customer information that is proprietary within the network.  The rules that govern customer information within the body of what is terms proprietary network information was not to address privacy and the protection of confidential customer information.
The main concern was competition among broadband providers within the Telecommunications Act of 1996 which, with the reclassification of ISP as common carriers under the FCC, did not necessarily heightened the point of privacy.  The Federal Trade Commission (FTC) which would normally have privacy over say on the issue of privacy and advertising and consumer protection, is devoid of that role regarding common carriers.
With ISPs being reclassified as common carriers, the FTC is left out of the mix.  The FTC Act does not cover common carriers, hence, it will not cover ISPs.  However, rulemaking is needed to address this needed regulatory bridge. In the meantime, the FTC and FCC have figured to set a joint memorandum of sorts to address enforcement efforts to ensure the gaps are covered from what was overlooked by the reclassification of broadband providers as common carriers.
The issue not foreseen but now forced to address is the fact that the FCC is forced to apply in a disjuncture way privacy  rules that were originally drawn to apply to telephone landline companies and not to ISP.  It is now that the FCC is addressing its need for rulemaking to address how to administer appropriate privacy rules over broadband providers.  This rulemaking initiative of the FCC will have to address how to protect the consumer private information.  This information is termed customer proprietary network information or CPNI.
The FCC, as it proceeds to address rulemaking over the privacy concerns to protect CPNI, must address several issues: ISP collecting data on consumer usage patterns; ISP profiling usage for third-party advertising, ISP’s working with data aggregators, and unfair competition and deceptive practices.  The last but definitely not least of the issues to be dealt with by the FCC rulemaking is data breaches and cyber security incidents compromising CPNI.
Nevertheless, there is a lot on the table for the FCC upcoming rulemaking to address privacy concerns regarding ISP as common carriers under the auspices of the FCC and still appreciating the potential ISP advertising revenue it could negatively impact.

Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
Copyright 2016, all rights reserved Lorenzo Law Firm, P.A.

Sunday, February 21, 2016

Trademark Internet Use Collides Regionally in Florida

A trademark used in a particular region of the country may not be absolutely alone with the existence of the Internet.  Marketing a business on the Internet has a ubiquitous presence to the service seeking potential customer.  Whether your business is in the southeast, such as Florida, and there is the existence of a wider market business with a similar name entering the local area, seniority in use, market definition by geography and industry type service all come into play in addition to sales method.
A situation along these lines was encountered by a Gainesville Florida company named Uber Promotions (UP) which provides limousine services in the 352 area code area of Florida. Uber Technologies (UT) entered the Gainesville area in 2014 where Uber Promotions was already operating since 2006.  The plaintiff, UP filed suit claiming that UT was causing confusion, in that it argued that UT was causing and committing  trademark infringement, unfair competition, false designation of origin and argued for cancellation of UT’s United States Trademark Registration(s), under Trademark Act of 1946, and under Florida’s Registration and Protection of Trademarks Act, § 495.131-141, Fla.Stat. in addition to under common law.  The plaintiff subsequently proceeded with a filing for a preliminary injunction on which the District Court for the Northern District of Florida ruled granting in part and denying in part.  The court articulated its analysis weighing into several points among which included the likelihood of Plaintiff prevailing on the merits, the level of irreparable injury to the plaintiff if the injunctive relief without granting, the level of harm potentially experienced by plaintiff as opposed to what level of harm the Defendant would experience with the injunction, and if the preliminary injunction would be a disservice to the public.
Along that taxonomy of points, the court dealt with the aspect of possible trademark confusion by dissecting the intent of trademark use, the mark’s strength, and its similarity with an eye towards finding for the presence of there being confusion; with the notion that there was a need to further analyze the basis for there being actual confusion, the similarity of services, and the sales methods.  The court noted the importance of distilling evidence by weighing into the element of possible confusion in order to eliminate the potential of the judge’s subjective impression inclined toward finding the presence of confusion.    Articulating a discussion from an 11th Circuit case,* that not much evidence is needed to demonstrate the confusion because the example of the confusion of a few customers shows likelihood of confusion of many.

The court’s consideration of the injunctive relief claim not only assessed the likelihood of success on the merits,  the possibility of incurring irreparable injury, the injury in the absence of the injunction would be greater than what the opponent would experience from the injunction,  and that there would not be an adverse effect to the public interest, it as well considered the precedent of extending a presumption of irreparable harm to the movant once the movant demonstrates likelihood to succeed on the merits of a trademark infringement claim.**

The court reasoned that the seniority of the UP’s trademark stood to be considered but its demand for UT to change its trademark would be a disservice to the public, essentially respecting its national reach.  The court as well noted that there was dissimilarity in sales methods where UT’s approach was through the interphase of an application on a mobile device.  The element of confusion was given careful consideration.

Altogether, the court angled towards it exercising its discretion in devising appropriate relief given the need to balance the interests at stake of competing claims and the considered taxonomy of factors.  With this it ordered UT to address particular use of keywords as search criteria with Google, Yahoo, and Bing so that words referencing UP will not result with UT’s area code number.  As a way to distinguish how the general public could access either UT or the local provider UP, the court emphasized use of wording along with phone number distinction so that local Gainesville customers would not confuse UP’s number as the UT Gainesville area number.  The court exercised its equity jurisdiction authority to style the relief to the composition of the case allowing for flexibility.

However, while the court’s focus was weighing on the mechanics of search engines and balancing the interests of the UT and reducing the confusion with the local UP, it naively expects UT to ensure what Google is going to do. Organic results cannot be ensured yet the court expects Uber Technologies to ensure that Google search results display specific organic search results.  The court misses that Uber Technologies cannot use AdWords to assuage its affirmative disclosure obligation and it cannot guarantee placement.  The court also misses that UT’s use of words may be able to avoid results that lead to Uber Promotions, but UT cannot guarantee that organically its telephone number will not appear with variations of Uber Promotions.  In essence, UT will conceivably appear to be out of compliance with the order because it cannot guarantee the results mandated by the order.  It will have to rely on exerting a good faith effort to assuage the court.

See Uber Promotions, Inc. v. Uber Technologies, Inc., 2016 WL 617450 (N.D. Fla. Feb. 16, 2016).
* AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1544 (11th Cir. 1986).
** Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir. 2000).

Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
Copyright 2016, all rights reserved Lorenzo Law Firm, P.A.

Monday, February 15, 2016

Music Access Going Offline

Music Access in time past was always a concern for the nostalgic music enthusiast, especially the desire to hold on to music treasures from one’s growing up years. There was the concerned about scratching and breaking and not being able to find another issue.  The digital innovation has liberated the music industry allowing for creative ways to store and listen on demand.  Additional innovation has been the advent of music account storage that protects the recordings.  The concern, as with the old neighborhood record store that closes for business, reemerges when a digital storage business’s service is short-lived.

The validity of this concern is underscored by the closing of mp3.com in 2003 and subsequently operational ceasing of IUMA (Internet Underground Music Archive) in 2006.  The account holder’s reliance on having continual access to its purchased music all of the sudden goes nowhere.  These two companies’ operational ending affected nearly 2 million account holders when the music went offline.  The experience thus far has been that the digital means of streaming and storage and safekeeping does not ensure perpetual access to music. 

Discussions about music access and music going offline has resurfaced over concern with audio storage companies having had recent financial statements below expectations.  The streaming businesses are competing and facing struggles enhancing their platforms to provide revenues and adequate compensation to the music creators. The harm from this industry shift could be saddled most by the independent broadcasters and new artists who do not have label commitments.  The ability to display their work with potential fans is huge for the new artist and a contributing benefit for known artists.  The ability to be able to discover new and up and coming artists is as well highly beneficial.

The music access that streaming storage services provide allows musicians to upload their work, some for a fee by paying an intermediary before doing so and some platforms allow uploading for free.  If these platforms cease to operate, the unsigned musicians will be hurt.  One way to obviate this disappearance is to host the storage of the sites whose viability is in question. The direction toward enhancing the music access is the music archive solution. The absence of a viable means to address storage of music risks losing hundreds of thousands of created work on the internet.  Digital means of media is not a sure thing for securing access to music and preventing stored music accounts from going offline.


Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
Copyright 2013-2016, all rights reserved Lorenzo Law Firm, P.A.  Digital Media Law
  

Saturday, February 13, 2016

Appropriation of Culture in Music Artistry


The issue of appropriation of culture in music is controversially discussed raising concerns for the use of culture as backdrops.  The argument goes that as an artist unveils the video of music scenes appear of a particular culture and people of that particular region.  The criticism is with the prop effects of the scene in and of itself without any voice as to the culture and potential input.  The concern as well is the possibility of creating stereotypes when using a culture or region as background to the displayed video.  Indeed digital media has become highly creative.

Related to appropriation is the message impact of choreography.  What value do we give music artistry without choreography, where the choreography is intended to pass on a message or be expressive of an idea or even a point of view as BeyoncĂ©’s choreographed Super Bowl L half time performance?  Could one argue that the artist is “appropriating” a message that can be misconstrued by listeners and viewers of the video or the live performance or both?   Seldom does one see a digital or live performance devoid of some form of a background or a choreographed component of the whole performance augmenting to the value of the artistry.

An artist can be standing in a desert showing dryness along with lyrics implying lack of human responsibility.  Can one argue that the artist is appropriating the issue of climate change for his or her financial gain?  The same can be said of an artist with the back drop of famished dying young children in Africa with lyrics of the need for love.  Could one argue then that the artist is misappropriating the plight of hungry children in the world? 

A lot of care is evidently taken by all these artistic examples to either embellish a performance’s appeal to the masses, elevate discussion of an issue, bring meaning to a subject of our time, or conversely just being creative and doing something for the sake of it being novel.  The artistry is without saying the central valuing aspect of the performance itself as a whole.  The meaning and the implications is not what gets copyright attention.  The line that should not be crossed is when the performance is offensive, disrespectful, and an exaggeration.  Digital musical performances will continue to appropriate particular themes, cultures, ideas, and messages to void the risk of otherwise being banal.


Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
Copyright 2016, all rights reserved Lorenzo Law Firm, P.A.
 

Wednesday, February 10, 2016

Broadcasting Competition of Distribution Agreements


Broadcasting competition of distribution agreements has been in the Federal Communications Commission’s (FCC) cross-hairs.  While under less than unusual circumstances a provider can enter into a contract to distribute its product exclusively or non-exclusively, the same cannot be said regarding agreements of communications content provider.  The concerns is with content that could draw an overwhelming amount of viewer traffic overshadowing the viewership of other broadcasters.  This is coming around as noteworthy as two major networks vie for broadcast rights for Thursday night football.  Hence, causing the FCC to do a double take with its anti-competition radar, so-to-speak.

The impetus is to stimulate competition as claimed but it appears that it may be more so to protect wider access to broadcast content. This transpired when the FCC was forcing cable providers to provide access to competitors who were regional sports networks, essentially ending exclusive arrangements. The desire to minimize the effects of exclusive broadcasting deals may be too far intrusive and can jeopardize the salient value of the product and the factors that embed its quality and public attraction.  (0)
As we see in the Internet and in the mobile world, mobile providers are seeking to connect exclusively with content providers, i.e., Netflix, hence the deal between distributors and content providers.  Anyone with an antitrust scoping eye can smell the anticompetitive setting. The content providers could be pushed aside in the market place by the sheer use of the existing market power of certain providers and create market segmentation. A deeper view will reveal that what appears as an exclusive arrangement among two broadcasters is a wider sphere including a select number essentially carving out rights for distribution. 
 
At the end of the day, consumers are constantly demanding the product that draws the distribution of content to the forefront of broadcasting that highly desired content, regardless if it’s from a social media platform or the a national sports league.  The consumers could stand to benefit regardless as long as there remains a variety of content to choose from as well as a variety of distribution sources.  The exclusive distribution deals, while enhancing reliability in delivery of programming, quality, and over all access in the market place, could as well cause market carve ups which will not be to the liking of millions desiring access.


Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
Copyright 2016, all rights reserved Lorenzo Law Firm, P.A.
 

Monday, February 8, 2016

Copyright Challenge - Ideas and Expression

Copyright for many individuals appears to be anything they write, express, or present on paper.  By putting content on a book one assumes it’s copyrightable, whether it is text, photos, or drawings.  For a yoga studio in California this was the mindset.  That which they organized together in the form of photos displaying poses was considered protected under copyright law.  Underscored by this belief, an organization exercising the Bikram methodology of poses had produced a compilation of photos displaying poses that were in a sequence.
Subsequently and throughout an undetermined period of time, Mr. Bikram Choudhury the author of the yoga pose sequence would issue cease and desist letters threatening anyone, including yoga studios who would practice the poses.  Several settlements were garnered but one studio challenged the efforts to prevent other studios from copying the poses in their classes.
The District Court in California noted the distinction between what is considered an ‘expression’ from what is an ‘idea’.  The latter is not acceptable for copyright protection.  The Court explained that the contents of a book, i.e., literary expression or photos are copyrightable, with the exception being the manner of form that it is presented.  The exact sequence itself was at issue and it drew the distinction between an expression and an idea.  The expression that is copyrightable is the presentment, if you will, of the photos in the book, but the selection of the photos or the order of the photos together in a compilation is not copyrightable.  That intellectual contribution, regardless of its benefits claimed, is not protectable.
The 9th Circuit affirmed the lower court by emphasizing that the displayed sequence in the otherwise copyrightable book, is not more of a ‘an idea, process, or system’ designed for a particular purpose and not serving as a form of ‘expression’ of an idea.  Its displayed format and structure of order of the selected photo sequence, as the Court determined, despite the urging that it was an expression by selecting the photos engendering a beneficial purpose, did not satisfy the rigors of a copyrightable expression.
See Bikram's Yoga College of India, L.P. v. Evolation Yoga, LLC.

Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
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Thursday, February 4, 2016

Child Privacy and the Apps They Play

Child privacy while playing with apps is something to consider.  The Federal Trade Commission (FTC) has been concerned.  The aspect of how information, that is children’s personal information, is shared with advertisers and the related networks brings to mind the requirements of the Children Online Privacy Protection Act (COPPA).
In 2013, the FTC amended the Act to include in the Rule the definition of ‘personal information’.  The FTC has been made aware that specific advertising was directed to children.  The FTC found that these third-party entities were advertising to children using ‘identifiers’ that strategically marketed to children.  The identifiers would link to the internet protocol of the child’s device being used which then provided advertising tailored to the child.
In pursuing legal action against app developers, the FTC argued that the thirty-party network advertisers using persistent identifiers were collecting personal information of the children.  Furthermore, the FTC asserted that the app developers were particularly designing apps for children with the combined functioning of other entities who would collect the user data.  Also, the FTC argued that the app developers did not inform the advertisers that children were being focused on with their apps.  The alarming aspect of these cases was that children were being targeted with specific advertising without allowing parental consent, nor providing notice, for the data that was being collected on their children.
Several app developers who developed apps focusing on children including Hair Salon Makeover, Marley the Talking Dog, My Cake Shop, and Animal Sounds have entered into settlement agreements with the FTC, to the extent that LAI Systems is obliged to pay a civil penalty of $60,000 and Retro Dreamer is obliged to pay a $300,000 civil penalty, both for violating COPPA.

Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
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Monday, February 1, 2016

Trademark Infringement and Sibling Rivalries

Trademark infringements may be common in the business world, but they are as well not unheard of among family members in business who are competing in the same products.  The Southern District Court in Ohio heard a case between siblings which touched on pivotal points regarding trademarks. The court wrestled with the issue of ‘use’ in commerce and the element of possible confusion. The court as well dealt with the issue of issuing a ‘license’ for the recipient’s use of the mark and the conditions for the license.

The court also saw the issues regarding the parties’ concern over the similarity of products in the marketplace.  Combined with this concern was the appearance of identical color, font, and similar word[s] in advertising.  To this latter concern the 6th Circuit Court of Appeals affirmed the modification of the injunction which previously drew the appeal seeking a revision.  The controversy between siblings arose when one brother, Jimmy Flynt, after his split with Larry Flynt, stopped paying his brother Larry fees for using trademarks licensed by HUSTLER.  Larry, the owner of the marks, sued to enjoin his brother’s use of the HUSTLER trademark and as stated in the filing from “using any trademark or any variation thereof owned by” himself or any of his entities.

The court modified its earlier injunction that prohibited Jimmy Flynt, stating that he was prevented from “[u]sing the name ‘Flynt’ in connection with the sale, promotion or advertising of adult entertainment products or services unless it is accompanied by the first name ‘Jimmy’ in the same font size, color, and style and on the same background color.”  The court used the trademark test stated in Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 609 (6th Cir. 2009), pointing to ownership, use on commerce, and likelihood for confusion. The court determined that Jimmy Flynt’s marketing plan would reasonably confuse the general public and creating an association with his brother’s Hustler business, hence meeting the three-part test.  The court also determined that as a result of the previous injunction being violated by Jimmy Flynt, it had to address how to prevent siblings competing in the marketplace causing confusion by using a product that is similar to what the Larry Flynt created.  Jimmy Flynt’s conduct and marketing would cause confusion with the LARY FLYNT trademark.  With that it concern, the court recognized that the case law does not prevent protection for use of personal name, where marketing had used their last names.  The case law does point to the need to find that there be unfair competition where a secondary meaning had arose from the advertising and marketing of similar products and that the offending commercial conduct pertains to the use of the last name.  Hence, the court reasoned as the court in Taylor Wine Co. case from the Second Circuit, that where there is the use of same last name, there must be a clear statement of no association to the other and that it is not a successor to the other.

The 6th Circuit, as did the 2nd Circuit, decided that a disclaimer was needed to demonstrate to the public the absence of association despite similarity of product, to prevent a secondary meaning.  The court found that since product use is the pivotal criteria to demonstrate ownership in trademark-infringement actions, see Homeowners Grp., Inc. v. Home Mktg. Specialists, Inc., 931 F.2d 1100, 1105 (6th Cir. 1991), that Larry and his corporations owned the LARRY FLYNT trademark with respect to retail goods in the adult retail stores.  Furthermore, despite previous abandonment of the LARRY FLYNT trademark application filing, the court found that by continuing the use in commerce, it held the rights to the mark in the adult related retail stores. Volkswagenwerk, 814 F.2d 812, 816–17 (1st Cir. 1987).  Over all, the element of possible confusion associated with last name drew the court to issue the need for a disclaimer to be publicly stated attesting to the absence of association between two sibling competitors.

Lorenzo Law Firm is “Working to Protect your Business, Ideas, and Property on the Web."
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