United States

1. TRADE MARK

1.1. Sources of law

In the United States, trademark rights are established under common law through use of a trademark to identify goods and services, with such common law rights extending where the trademark has been used. Federal law provides additional benefits through a statutory framework for registration of marks and for enforcement of both registered and unregistered marks, primarily under the federal Lanham Act. 15 U.S.C. §§ 1051 et seq. US states and territories also have statutes that address the registration and enforcement of marks at the state/ territorial level.

  Court decisions play an important role in the development of US trademark law, and there are differences among courts as to how certain aspects of trademark law are treated, making it important to consider forum selection in trademark litigation. Court actions to enforce rights in federally protected trademarks typically are brought under both federal law (section 32 of the Lanham Act for federally registered marks; section 43 of the Lanham Act for unregistered marks) and applicable state law. For federal causes of action, see 15 U.S.C. § 1114 (federallyregistered marks) and 15 U.S.C. § 1125 (for unregistered marks). Courts will look to decisions under federal trademark law in applying corresponding state trademark law. Decisions about where to file a court action to enforce trademarks should take into account any key differences among the 12 potential federal circuits in which a case could be filed, as well as options under state law or through administrative proceedings at the US Patent and Trademark Office (USPTO).

  The USPTO's Trademark Trial and Appeal Board (TTAB) handles administrative proceedings relating to federal registration (but not use) of trademarks, and may order a trademark registration to be refused, cancelled, modified, issued or shared geographically among registrants. 15 U.S.C. §§ 1067-1068. TTAB decisions may result in issue preclusion in a subsequent court action (such as one filed to address use of a trademark), but only if the TTAB has decided the same issue as is before the court. B & B Hardware, Inc. v Hargis Indus., Inc., 135 S. Ct. 1293 (2015).

  US trademark law has been shaped by the international treaties to which the United States is a signatory, particularly the Paris Convention for the Protection of Industrial Property (Paris Convention), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), and the Protocol Relating to the Madrid Agreement (Madrid Protocol). The Paris Convention and the TRIPS Agreement call on each member country to provide the same benefits to the nationals of other member countries as it provides to its own. These treaties have been implemented through the federal statutory framework. For example, because of the Paris Convention, the Lanham Act permits nationals of other member countries to claim in a US trademark application the filing date of their first-filed non-US application for the same mark if the US application is filed within six months after that first-filed application (US nationals receive from other member countries a reciprocal ability to claim the same "Convention Priority" benefit in applications they file in those countries). The Madrid Protocol provides a streamlined process for filing trademark applications in multiple countries. 

1.2. Substantive Law

The strength of a trademark is a key factor in trademark protection and enforcement under US law. Generally, to succeed on a claim of trademark infringement or unfair competition in a court in the United States, a trademark owner or its exclusive licensee must prove there is a likelihood of confusion between its mark and an identical or similar mark subsequently adopted by someone else. Likelihood of confusion is also the test used by the TTAB for preventing registration of a mark based on confusing similarity. In analyzing whether there is a likelihood of confusion between two marks, US courts and the TTAB apply a multifactor test. Although the set of factors and how they are weighed varies among courts and between courts and the TTAB, the strength of the mark is always a factor. Recot Inc. v Becton, 214 F.3d 1322 (Fed. Cir. 2000); see also Polaroid Corp. v Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961) (setting out the initial multifactor test in this context).

  Famous marks also benefit from federal and state laws prohibiting dilution of a famous mark, which do not require proof of likely confusion. Under the Trademark Dilution Revision Act of 2006 (TDRA), once a mark becomes famous, its owner can stop others from subsequently using a mark or trade name in US commerce that is likely to dilute the famous mark either by blurring (an association that impairs the mark's distinctiveness) or by tarnishment (an association that harms the mark's reputation). 15 U.S.C. § 1125(c). A famous mark under the TDRA is one that is "widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner".15 U.S.C. § 1125(c)(2)(A). Factors leading to a finding of fame under the TDRA include high and geographically broad sales figures, advertising and publicity, as well as evidence of strong consumer recognition. 15 U.S.C. § 1125(c)(2)(A)(i)-(iv). Court cases interpreting the TDRA have emphasized that the level of fame required is quite high. Fame in only a certain business niche is insufficient for purposes of federal law, although fame within a particular state may suffice under similar state statutes. Although a trademark registration is not required to bring a claim under the TDRA, it may be more difficult to prove fame without a registration.

  Owners of luxury brands have been successful in establishing fame and receiving the benefits of the TDRA. See, for example, Burberry Ltd. v Euro Moda, Inc., 2009 WL 1675080 (S.D.N.Y. 2009) (BURBERRY for apparel); Chanel, Inc. v Makarczyk, 110 USPQ2d 2013 (TTAB 2014) (CHANEL for apparel, jewelry and personal care products); Malletier v Dooney & Bourke, Inc., 561 F. Supp. 2d 368
(S.D.N.Y. 2008) (LOUIS VUITTON Monogram Multicolor for handbags).  

1.3. Enforcement

To establish that a registered trademark is enforceable under 15 U.S.C. § 1114 or an unregistered trademark is enforceable under 15 U.S.C. § 1125(a) of the Lanham Act against infringers, a trademark owner or its exclusive licensee must prove the validity of the mark, the ownership of the mark and the exclusive right to use the mark in commerce for the specified goods and services. The case then turns on whether there is a likelihood of confusion under the multifactor test discussed above.

  From an evidentiary perspective, registration on the USPTO's Principal Register provides rebuttable presumptions regarding the validity and ownership of the registered mark and the owner's exclusive right to use it for the specified goods and services. 15 U.S.C. § 1057(b). These presumptions become conclusive for a trademark registration on the Principal Register that has become incontestable through continuous use for five years after the date of registration and that meets certain other criteria. 15 U.S.C. § 1065. In the absence of the benefit of a registration, a trademark owner would need to prove these facts by showing when it first used the trademark in commerce and that it has continuously used the mark in commerce. 

  Various types of evidence can be used to establish ownership and use of a mark and the multiple factors used to establish likelihood of confusion. Such evidence could include written documents, examples of products or advertisements featuring the mark, records showing company expenditures on advertising and promotion of the mark, and testimony by witnesses of the use. Consumer surveys conducted by experts are frequently used as evidence that a mark has acquired distinctiveness or that there is a likelihood of confusion between two marks.

  Under federal trademark law, trademarks can be enforced against other trademarks, trade names and other distinctive signs to the extent they are used in commerce in connection with goods and services. See 15 U.S.C. §§ 1114, 1125(a) (statutory language covers any infringement through use of any word, term, symbol, device or combination of the foregoing). As a general principle, the standards for trademark infringement also should be applied similarly for trademarks and other source identifiers used online and should be actionable if such designations are used in commerce in connection with goods and services. This would include use of a mark in a social media user name or handle or in a hashtag.

  Trademarks can also be enforced against domain names, but the standard for establishing a violation is different. In addition to proving a likelihood of confusion or dilution, a trademark owner seeking to establish that a domain name infringes must also prove that the domain name registrant intended in bad faith to profit from the owner's mark. Bad faith can be shown by evidence that the registrant provided false contact information when registering the domain name, offered to sell the domain name to the mark owner without ever having used the domain name, has a prior history of purchasing domain names containing trademarks of third parties, or is unable to demonstrate that it ever genuinely intended to use the domain name in connection with a bona fide offering of goods or services. Although bad faith must be shown, there is no requirement to prove that a domain name registrant is making commercial use of the domain name (which is required for infringement or dilution by use of a mark). See 15 U.S.C. § 1125(d)(1)(A).

  Standards also continue to evolve to address online identifiers that are not visible to the average user, such as metatags. Because metatags describe webpage content, the use of trademarks owned by others in metatags has given rise to trademark infringement challenges. As metatags have decreased in importance in search engine optimization, however, more cases have found in favor of a lack of infringement. Courts now tend to look at what actually takes place as a result of the use of such metatags (for example, whether the metatag diverted consumers to the website in question or otherwise increased its prominence).

  The First Amendment to the US Constitution (protecting the right to freedom of expression) has given rise to defenses to trademark infringement regarding fair use of trademarks, including parody. Under the fair use doctrine, a trademarked term can be used in its ordinary, descriptive sense to describe a product or a service or when it is necessary to identify a product or service of the trademark owner. A trademark parody juxtaposes the trademark with an irreverent representation of the trademark that communicates satire, ridicule, joking or amusement. See Louis Vuitton Malletier, S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252 (4th Cir. 2007). Demonstrating that the allegedly infringing or diluting act is a parody can be a defense to a claim for infringement or dilution as long as the parody is not likely to cause confusion with or tarnish the trademark.

  Trademark enforcement actions in the United States typically claim both trademark infringement and unfair competition in the same action from the same set of facts. Under US law, actions based on the same facts must be brought in the same proceeding. 

 

2. COPYRIGHT

2.1. Sources of law

In the United States, copyright law is governed by federal statute, specifically the Copyright Act of 1976, as amended. 17 U.S.C. §§ 101-810; 44 U.S.C. §§ 505, 2113; 18 U.S.C. § 2318.

  Court decisions play an important role in interpreting the Copyright Act. There are differences among courts as to how certain aspects of copyright law are treated, making it important to consider forum selection in copyright litigation and take into account any key differences among the 12 potential federal circuits in which a case could be filed.

  US copyright law has been shaped by the international treaties to which the United States is a signatory, including the Berne Convention for the Protection of Literary and Artistic Works and the Universal Copyright Convention. Works published by an author who is a national or domiciliary of any country that is a member of these treaties or that are first published in a member country, or published within 30 days of first publication in a Berne Convention country, are protected under US copyright law based on these treaties. Copyright protection may also be available for works of an author who is not a national or domiciliary of a country that is not a member of these treaties if there is a bilateral agreement or free trade agreement between the United States and such country.  

 

2.2. Substantive law

Eight general categories of works are protectable under US copyright law: literary works; musical works; dramatic works; pantomimes and choreographic works; pictorial, graphic, and sculptural works; motion pictures and other audiovisual works; sound recordings; and architectural works. 17 U.S.C. § 102.

  US copyright protection is not available for "useful articles," which are objects that have utilitarian functions. 17 U.S.C. § 101. However, copyright can protect a pictorial or graphic work that can be identified and is capable of existing separately from the utilitarian aspects of an object. 17 U.S.C. § 101. For example, the design or shape of a piece of luggage is not protectable by copyright because it has a utilitarian function, but a floral design etched on the luggage could be protectable if it can be identified and can exist separately from the utilitarian aspects of the luggage. This "separability" test is fact specific, which has caused different courts to reach different conclusions when determining whether a design feature of a useful article has copyright protection.   

  The owner of a US copyright has the exclusive rights to reproduce the work, to prepare derivative works based upon the work, to distribute copies of the work to the public, to perform the work publicly, to display the work publicly, and to perform the work publicly by means of a digital audio transmission. 17 U.S.C. § 106.

  US copyright generally does not protect moral rights. The Visual Artists Rights Act of 1990 gives authors of certain visual art works (paintings, sculptures, drawings, prints and still photographs produced for exhibition) the exclusive right to attribution and integrity, but only if such works are single copies or signed and numbered limited editions of 200 or less. 17 U.S.C. § 106A.

  Under US law, the author or authors of a work generally own the copyright in the work. 17 U.S.C. § 201. The exception to this general principle is a "work made for hire," the copyright in which is owned by the employer, which can be a firm, an organization or an individual. There are two types of "work made for hire". First, a work prepared by an employee in the scope of his/her employment is a work made for hire without any need for a written instrument or assignment; the employer automatically owns the copyright when the work is created in the scope of employment. Second, a work that is specially ordered or commissioned for certain types of uses (specifically, as a contribution to a collective work, part of a motion picture or other audiovisual work, a translation; a supplementary work, a compilation, an instructional text; a test or a test answer, or an atlas) is a work made for hire if the parties agree to that result in a signed written instrument. 17 U.S.C. § 101.

  Transferring the copyright in a work that does not qualify as a work made for hire, including, for example, a work by a consultant, shareholder, director or supplier, requires an assignment that is in writing and signed by the owner of the rights or his/her agent. 17 U.S.C § 204. Authors or their heirs have the right to terminate the assignment of a copyright. If the assignment did not include the right to distribute copies, the assignor may terminate the grant 35 to 40 years after the execution of the grant. If the assignment included a right to distribute copies, the assignment can be terminated during a 5 year period beginning with the earlier of a) 35 years after publication or b) 40 years after the execution of the assignment. Notice must be served no less than two years and no more than 10 years before the date of termination specified in the notice. The termination right was created to help authors to be adequately compensated for their works, and the time period between notice and termination is intended to encourage negotiations between the author and the assignee.

  To avoid questions as to whether a work constitutes a work made for hire, it is prudent for a company to include an assignment provision as a backup in any agreements with consultants, shareholders, directors or suppliers. Such a provision should expressly state that the individual or entity assigns any copyrights created in connection with the agreement to the company, and should identify to the extent feasible the specific works for which a copyright will be assigned.

  For works published on or after January 1, 1978, US copyright protection lasts for the life of the author plus 70 years after the author's death if the author is an individual. For a joint work prepared by two or more individuals who did not work for hire, the term lasts for 70 years after the last surviving author's death. For works made for hire and pseudonymous and anonymous works, the copyright lasts the shorter of 120 years after creation or 95 years after publication.

  For a work published prior to 1978, whether the work is protected and how long the protection lasts are complex questions depending on who the author was, where the work was first published, and whether the work complied with requirements of US copyright law then in place. 

2.3. Enforcement

Copyrights can be registered in the United States, and a registration is required in order to bring a legal action to enforce a copyright in a US work (but not for a non-US work). 17 U.S.C. § 411. The copyright registration process requires submission of a deposit copy to the Copyright Office. 17 U.S.C. § 408. Statutory damages of up to $30,000 per work, or up to $150,000 per work if the infringement is wilful, are available if the registration was effective prior to infringement, or within three months of publication. 17 U.S.C. §§ 412, 504.

  Although a copyright notice is not required to claim US copyright protection, use of a copyright notice is recommended when possible to alert the public to the claim to copyright ownership and to defeat a defense of innocent infringement.

  Copyright infringement in the United States is assessed under a two-part test:

  • whether the alleged infringer had access to the copyrighted work; and 
  • whether the alleged infringement is substantially similar to the copyrighted work. 

  A copyright in the United States generally can be enforced against any type of work that is substantially similar to the copyrighted work. For example, a design (including a trademark in a two-dimensional design) could potentially infringe a copyrighted work. Under US law, a single word or short phrase is likely not protectable by copyright, so it is unlikely that a domain name, a trade name, or a pseudonym could infringe a copyright.

  It is possible to bring in the same court an action that includes a claim for copyright infringement and a claim for trademark infringement or unfair competition. In fact, because actions based on the same facts must be brought in the same proceeding under US law, copyright and trademark claims related to the same facts must be brought in one action.  Unfair competition claims may be pre-empted by the Copyright Act if the essence of the claim is that the defendant reproduced, performed, distributed or displayed certain content, which are rights protected exclusively by copyright. See, for example, Redd Grp., LLC v Glass Guru Franchise Sys, Inc., No. 12-CV-04070-JST, 2013 WL 3462078, at *6 (N.D. Cal. July 8, 2013) (holding that the unfair competition claims were preempted by the Copyright Act because they were exclusively tied to the copyright infringement claim). See also Dastar Corp. v Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) (holding that an unfair competition claim cannot be based on the defendant's false claim to be the author of a copyrighted work; that type of allegation must be brought as a copyright action). 

  A variety of defenses are available to a claim of copyright infringement, including, but not limited to, challenges to ownership of the copyright, the validity of the copyright (for example, whether the work is sufficiently original or otherwise protectable), express or implied license to use the copyrighted work, abandonment, and statute of limitations.

  The Copyright Act also explicitly authorizes a fair-use affirmative defense to copyright infringement claims. Four factors are used to determine whether the use of a copyrighted work is a fair use:

  • the purpose and character of the use, including whether it is of a commercial nature or for non-profit educational purposes; 
  • the nature of the copyrighted work (such as, fiction versus factual); 
  • the amount and substantiality of the portion used; and 
  • the effect of the use upon the potential market for or value of the copyrighted work.

  17 U.S.C. § 107. The Copyright Act lists use of a work for purposes of criticism, comment, news reporting, teaching, scholarship or research as an example of use that may constitute fair use. 17 U.S.C. § 107. Copyright can be enforced against an unauthorized use in a parody or in comparative advertising. The defendant would have to affirmatively prove that its parody or advertising constitutes a fair use of the original work.

  A valid copyright could be deemed unenforceable if the copyright owner "misused" the copyright by claiming rights or seeking to stop competition beyond that to which it is entitled based on the copyright.

  There is a three-year statute of limitations for copyright claims in the United States. 17 U.S.C. § 507. There is a split among circuits as to when the clock starts running, with the majority of circuits following the "discovery" rule (starting the clock when the copyright owner discovered or reasonably should have discovered the infringement) and a minority of circuits following the "injury" rule (starting the clock when the infringement began). 

 

3. DESIGN

3.1. Sources of law

In the United States, the primary means of protection for industrial designs is through the design patent system, which is governed by federal statute. 35 U.S.C. § 171. Federal court decisions play an important role in interpreting the law. Selection of an appropriate forum to file a court action for design patent infringement should take into account any key differences among the available 12 potential federal circuits. Design patent rights are not recognized under state or common law, and protection is only obtained once a US design patent issues.

  There is no unregistered design patent right in the United States, and the standards for protection in the United States are, in some respects, higher than in some other jurisdictions, most notably in Europe. There have been efforts to introduce US legislation to expand protection specifically for fashion designs. Typically, these bills have proposed to give designers of innovative clothing and accessories a way to stop others from using "substantially identical" designs for a shorter period of time than is currently available for a design patent. However, these efforts have so far been unsuccessful. 

  The United States is a signatory of the Paris Convention for the Protection of Industrial Property (Paris Convention) and the 1999 Geneva Act to the Hague Agreement Concerning the International Registration of Industrial Designs (Hague Agreement).  The Paris Convention provides the right to claim priority in a patent design application filed in the US from any application filed in contracting states within six months of an earlier filed corresponding application. 35 U.S.C. § 172. The Hague Agreement offers the possibility of registration of industrial designs in member countries by filing a single application in a single language. 

3.2. Substantive law

US design patents can protect new, original and ornamental designs for any article of manufacture. 35 U.S.C. § 171. As a result, US design patents may relate to a variety of luxury products, such as apparel, jewelry, motor vehicles, cosmetics, textile designs, home furnishings, technology devices and even graphical user interfaces for online boutiques. A design patent may cover the shape or surface ornamentation of an article or a combination of the two. USPTO, Manual of Patent Examination Procedure, 9th Ed. March 2014, § 1503.02. 

  Two or three dimensional designs can qualify for US design patent protection. In either case, the design must be novel and not have been obvious to a designer of ordinary skill of that type of product. 35 U.S.C. §§ 102, 103. In addition, a design must be "primarily ornamental" to qualify for design patent protection. Designs that are primarily functional rather than ornamental do not qualify and are more appropriately covered by utility patents. Richardson v Stanley Works, Inc., 597 F.3d 1288 (Fed. Cir. 2010). Even if a design incorporates certain elements with a functional purpose, design patent protection may be possible if the overall design is not dictated primarily by functional considerations. L.A. Gear, Inc. v Thom McAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir. 1993).

  Patent rights generally are owned by the inventors until transferred to another person or entity. Assignments of patent rights must generally be signed and in writing. 35 U.S.C. § 261. Ownership of patent rights may be transferred in ways other than by assignments, however, such as by operation of law. Azakawa et al. v Link New Tech. Int. Inc., 520 F.3d 1354, 1356 (Fed. Cir. 2008) (transfer of title to a US patent may be made from an inventor to his/her heirs immediately upon the inventor's death under Japanese law). In the United States, employers do not necessarily own the patented designs of their employees even if the design was conceived or reduced to practice during the course of his/her employment. Banks v Unisys Corp., 228 F.3d 1357, 1359 (Fed. Cir. 2000). Obtaining a written assignment from an employee is, therefore, usually required in order for an employer to have legal title to a design patent. The language used in such an agreement is important. Courts have held that an agreement merely reciting a promise to assign rights to an invention in the future is not sufficiently drafted to transfer legal title to the patent. Bd. of Trs. of Leland Stanford Junior Univ. v Roche Molecular Sys., Inc., 583 F.3d 832, 841-842 (Fed. Cir. 2011) (finding that "agree to assign" language in an agreement with a first entity was ineffective against "will assign and do hereby assign" language in a later agreement with a different entity).

  The term for US design patents issuing on applications filed on or after May 13, 2015 is 15 years from issuance of the design patent. For US design patents issuing on applications filed before May 13, 2015, the term of the issued patent is 14 years from the issuance date. 35 U.S.C. § 173. Unlike utility patents, design patents do not require the payment of maintenance fees or annuity fees. Manual of Patent Examination Procedure, 9th Ed. March 2014, § 1502.01. 

3.3. Enforcement

In the United States, the "ordinary observer" test is the sole test for determining whether a design patent has been infringed. This test asks whether two designs are reasonably viewed as sufficiently similar to one another such that a purchaser (familiar with prior designs in the field and giving a typical level of attention) would be deceived by the similarity and induced into purchasing one thinking it is the other. Egyptian Goddess, Inc. v Swisa, Inc., 543 F.3d 665, 678 (Fed. Cir. 2008) (en banc); see also Pac Coast Marine Windshields Ltd. v Malibu Boats, LLC, 739 F.3d 694 (Fed. Cir. 2014); Gorham Mfg. Co. v White, 81 U.S. 511 (1871) (first setting out the test).

The ordinary observer test is an objective test. Actual copying is not necessary for a finding of patent infringement, although evidence of deliberate copying may be strong evidence of willful infringement. L.A. Gear, Inc., 988 F.2d at 1126-27 (noting the lack of evidence to counteract evidence of copying). If proven, willful infringement may result in recovery of treble damages from an infringer. Braun Inc. v Dynamics Corp. of Am, 975 F.2d 815, 822–24 (Fed. Cir. 1992) (describing the statutory scheme for damages in design patent infringement matters and finding that enhanced damages are not appropriate where a prevailing plaintiff elects to recover the defendant's profits instead of trebling compensatory damages).

Only registered design patents may be enforced in the United States. Patent applications and other nonregistered designs cannot form the basis for a design patent infringement suit. Provisional rights damages may be available to a prevailing plaintiff asserting design patents on designs that published as a result of an international filing. 35 U.S.C. §154(d).

In general, a design patent is infringed where someone makes, uses, offers to sell, sells or imports into the United States a patented ornamental design for an article of manufacture without the authority of the patent holder. 35 U.S.C. §§271(a), 171. Though the authors are not aware of any such cases, infringement of a design patent could potentially arise from the unauthorized use of a design in connection with a trademark, in social media or in comparative advertising. Possible bases for such a claim might arise where the use meets the controlling contract law standard as an offer for sale of the patent article or where the patented design is of a two-dimensional design such as a computer generated icon or a type font. See, MPEP §1504.01(a), Adobe Sys., Inc. v Southern Software Inc., 45 USPQ2d 1827 (N.D. Cal. 1998) (holding that typeface designs are entitled to patent protection).

A variety of defenses are available to a claim of design patent infringement, including noninfringement (for example, by applying the ordinary observer test described supra; by asserting permissible repair); challenges to the validity of the design patent (for example, whether the claimed design was anticipated by or obvious in view of the prior art, that the claimed design lacks definiteness or is driven entirely by functional considerations); challenges to the enforceability of the design patent (for example, by demonstrating that the party asserting the claimed design lacks standing to assert the patent, or that the design patent was procured through inequitable conduct by the application during prosecution). 

  Permissible repair defenses may arise when the owner of a product covered by a design claimed in another party's design patent is accused of infringing the patent merely by replacing worn components on the product. The defense arises from the principle that rights of purchasers of patented articles including the right to use and repair the article subject to overriding conditions of the sale. Jazz Photo Corp. v Intl Trade Comm'n, 264 F.3d 1094, (Fed. Cir. 2001); Aro Manufacturing Co. v Convertible Top Replacement Co., 365 U.S. 336 (1961) (holding that replacement of a convertible fabric top constituted permissible repair).

No recovery of damages can be made for infringement committed more than six years prior to the filing of a complaint or counterclaim for infringement. 35 U.S.C. § 286.

A design patent holder may take action claiming both design patent and copyright infringement and/or unfair competition for the same set of facts. See, for example, Yurman Studio, Inc. v Castaneda, 591 F. Supp. 2d 471 (S.D.N.Y. 2008) (granting summary judgment in part for the plaintiff on the issues of design patent and copyright infringement because certain of the defendant's jewelry products were substantially similar to the plaintiff's patented designs and/or copyrighted designs). 

 

4. RIGHT OF PUBLICITY

5. PRODUCT PLACEMENT

Within the United States, brand owners can take advantage of opportunities to have their products, services or trademarks featured within a program in return for payment or other consideration, subject to consumer protection considerations. The US motion picture industry has provided many such opportunities to showcase luxury brands of apparel, jewelry, automobiles, beverage alcohol and other types of products. Product placement opportunities are continuously evolving and exist in various other media.

The details of the product placement agreement are important because a breach of contract claim is the primary means of obtaining relief if the other party fails to perform, in which case the likely remedy is money damages. The brand owner also may be able to bring a claim for trademark infringement if the other requirements for such a claim are met, for which the likely remedy is an injunction to stop the use.

From a consumer protection standpoint, if product placement does not involve any objective claims about the product, there should be no need to disclose the circumstances of the placement (for example, that it was in exchange for payment). If a product placement involves express or implied objective claims about the product, and the claims are false or misleading in any material respect, then the claims could be actionable as false advertising. See US Federal Trade Commission Act, 15 U.S.C. § 45 (generally prohibits unfair or deceptive acts or practices). 

6. . PROTECTION OF CORPORATE IMAGE AND REPUTATION

Within the United States, laws regarding rights of publicity and/or privacy generally do not extend to legal entities/corporations, although rights of publicity in certain states have been interpreted as covering musical groups or other business names that have established consumer recognition. Legal entities/corporations also may seek to enforce their rights in their trade names using trademark law. 

  Subject to the limited exception discussed below pertaining to resale price maintenance (RPM), it is generally permissible under the antitrust laws in the United States to include in agreements with resellers clauses aimed at protecting the image and reputation of a luxury brand supplier. In addition, liquidated damages clauses may be enforceable in the context of a breach of certain such contractual commitments unless:

  • the amount of anticipated damages was easily ascertainable at the time the contract was formed; or 
  • at the time the contract was formed, the liquidated damages amount was grossly disproportionate to the anticipated damages that would be incurred in the event of a breach. 

  Moreover, except in rare circumstances, such as where the supplier is a monopolist and has engaged with another party in a prior profitable course of dealing, a luxury brand supplier may decline to do business with another party for any reason, including because its image is below a certain defined standard. See Verizon Commc'ns Inc. v Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004). As a corollary, a luxury brand supplier generally may by agreement prohibit a reseller from selling to a retailer that does not meet certain standards of quality. From an antitrust standpoint, such a restriction would qualify as a non-price vertical restraint, meaning that it would be analyzed under the rule of reason, and, provided that the supplier has a legitimate business justification (for example, preserving the image of the brand), the restriction should survive scrutiny.

  Since the United States Supreme Court's 2007 decision in Leegin Creative Leather Products, Inc. v PSKS Inc., 551 U.S. 877 (2007), prohibiting a reseller from selling a product below a certain price by agreement - a practice known as RPM- is also governed by the rule of reason standard under federal antitrust law. Thus, an RPM agreement generally will be found lawful under federal antitrust law, provided that the agreement is not a mechanism to facilitate horizontal collusion at the reseller level and there is a legitimate pro-competitive justification for the practice. Although RPM agreements are governed by the rule of reason under federal antitrust law, various states regard them as per se illegal under their state antitrust statutes. Consequently, a luxury brand with distribution throughout the United States cannot practically implement RPM agreements. As such, most luxury brands have retained their pre-Leegin practice of suggesting a resale price (MSRP) to their resellers and unilaterally terminating those resellers that decline to comply. If executed properly, this practice should not be regarded as an agreement between the supplier and reseller and thus should escape antitrust scrutiny. See United States v Colgate & Co., 250 U.S. 300 (1919).

  Another frequent question for luxury goods suppliers pertains to whether to implement a contractual or other requirement that effectively dissuades purchasers from buying replacement parts from anyone other than the original supplier. This could present antitrust concerns if:

  • there are high switching costs for the consumer; 
  • the requirement is not disclosed at the time of the original purchase; and 
  • the supplier changes policy and increases the price of the replacement parts once the customer is locked in. 

  See Eastman Kodak Co. v Image Tech. Servs., Inc., 504 U.S. 451 (1992). As a practical matter, for an antitrust claim like this to be viable, there must be a feasible alternative supplier of replacement parts because harm to the competitive process is an essential requirement for a successful claim under US antitrust law. 

4.1. Sources of law

Within the United States, the right of an individual to control the commercial use of his/her name, image, likeness, or other unequivocal aspects of identity is principally a function of state law. Approximately half of the states recognize the right of publicity under statutory and/or common law. In general, commercial use of an individual's identity is a violation of that individual's publicity right and entitles the individual to recover damages in court. The specific rights vary state to state, and choice of law is therefore critical to any analysis. Choice of law is generally made with regard to the relevant individual's domicile and where the action was filed. New York and California have the most well-developed law in this area, and each has a right of publicity statute and recognizes the right under common law.

  No federal right of publicity exists per se, but claims for causing false impression of sponsorship, affiliation or endorsement can be brought under Section 43(a) of the Lanham Act. 15 U.S.C. § 1125(a); see, for example, Fifty-Six Hope Road Music, Ltd. v A.V.E.L.A., Inc., 778 F.3d 1059 (9th Cir. 2015) (affirming award of US $350,000 in damages based on likelihood of confusion resulting from unauthorized use of Bob Marley's image on T-shirts).   

4.2. Substantive law

Because the existence and parameters for claiming a right of publicity differ from state to state, and even under statutes versus common law within a single state, it is difficult to make generalizations as to the substantive law that applies in this area.

  In states where the right of publicity is recognized, it typically applies not only to celebrities but also to other individuals, provided that the elements for a claim are satisfied.

  There is variation among states as to whether the right of publicity survives death and is descendible/inheritable or otherwise transferable. The majority view is that rights of publicity survive death, at least in cases where the person to whom the right is tied exploited the right for commercial gain during his/her lifetime. Some states limit the right to a certain number of years after death. See, for example, Va. Code Ann. § 8.01-40(b) (right of publicity recognized for 20 years after death).

  Whether rights of publicity can be assigned and licensed is a question under state law. In general, courts typically have found that these rights can be assigned and licensed. Considerations to take into account in connection with assignments and licenses of rights of publicity are the scope of the rights being assigned or licensed, who has the right to enforce and protect the rights (including by way of filing for trademark or copyright protection incorporating the rights), compensation, and what rights are retained by the individual. A recent case in California concluded that the right to bring an action for violation of a right of publicity can be assigned by itself, even if granted only with respect to one particular violation. Timed Out, LLC v Youabian, Inc., 229 Cal. App. 4th 1001 (2014).

  Actions for "false endorsement" under Section 43(a) of the Lanham Act generally are analyzed using trademark principles, including applying a likelihood of confusion standard and defenses such as fair use. As a result, these actions typically are more difficult to prove than violations of state right of publicity law where it is available. 

4.3. Enforcement

In connection with enforcement of rights of publicity under available state law, requirements vary among states with respect to standing, elements of the claim, evidence needed, remedies and other aspects of a case.

  Rights of publicity typically are limited to violations from advertising use or otherwise in commercial use. See, for example, NY Civil Rights Law §§ 50-51 (prohibiting use for advertising purposes or for the purpose of trade); Cal. Civ. Code § 3344(a) (prohibiting use on products, merchandise, goods or services or for purposes of advertising or soliciting purchase of the same). It is not generally necessary to prove that the individual's rights have commercial value to obtain an injunction and other remedies. Violations typically are found merely by showing that a protected publicity right has been used in a prohibited manner without permission (written permission is usually required).

  Monetary damages and injunctive relief are available remedies for violations of right of publicity, including punitive damages in some cases. See, for example, NY Civil Rights Law §§ 50-51 (punitive damages may be awarded if the use was made "knowingly"); Cal. Civ. Code § 3344(a) (permitting an award of damages, profits, punitive damages, and attorneys' fees and costs to a prevailing party).

  In general, defenses to liability under right of publicity case law are limited to exceptions for "newsworthiness" and "incidental use". The "newsworthiness" defense reflects freedom of speech considerations and a recognition that it may be appropriate to refer to an individual in connection with the reporting of newsworthy events. This defense typically is relied on by the news media, including advertising related to the sale and advertising of the news media.  Incidental use applies where the use is fleeting and has no real commercial significance, such as where an individual is not recognizable.