Insights

On May 9, 2024, the U.S. Supreme Court issued a ruling in Warner Chappell Music Inc. et al. v. Sherman Nealy et al., Case No. 22-1078, resolving a circuit split in federal courts as to whether it is possible to recover copyright damages beyond the three-year filing statute of limitations. The court held in a 6-3 ruling that there is no time limit on monetary recovery, while leaving the three-year filing deadline intact.

On January 11, 2024, the Federal Trade Commission (“FTC”) published in the Federal Register a Notice of Proposed Rulemaking (“NPRM”) to modify the Children’s Online Privacy Protection Rule (“COPPA Rule”), a set of regulations implementing the Children’s Online Privacy Protection Act (“COPPA”) statute. Overall, the NPRM seeks to strengthen and clarify the COPPA Rule in response to technological advances and changes in the way children interact with online offerings. In particular, the NPRM follows a public comment period in which the FTC noted novel issues affecting the COPPA Rule, including the educational technology sector, voice-enabled connected devices, and platforms directed to general audiences that host third-party content directed to children. Comments on the NPRM are due on March 11, 2024.

Although one wouldn’t typically look to the Federal Election Commission as a leader in setting regulations about intellectual property, the threat of deep fakes generated by artificial intelligence spurred recent action to prohibit the use of such images in the 2024 elections.[1] The urgency is obvious: peoples’ ability to use AI to create fake images has evolved much faster than the technology to detect it or the ability of regulators to manage it.[2] These concerns are not limited to politics: players in the music industry have been negotiating around the use of generative AI to create music that mimics established recording artists,[3] and lawsuits have already surfaced over deep-fake technology across the entertainment industry.[4] While there is no consensus on how this will affect these industries, or brands in general, Congress has recently taken more urgent actions as well, including the Senate subcommittee on Intellectual Property holding its second hearing in two months on the intersection of AI and the right of publicity.[5]

In June 2021, Penn State filed a lawsuit for trademark infringement against online retailer, Vintage Brand, LLC for selling items containing the school’s trademarks. Vintage Brand countersued claiming, among other things, that three of the university’s marks at issue should be cancelled because they are ornamental and fail to function as trademarks. It is this claim that Penn State sought to dismiss.

NFTs (non-fungible tokens) hit the scene in 2017 with CryptoKitties, a game on the Ethereum blockchain for buying, selling, and breeding digital cats. Clearly, CryptoKitties represents a humble start for NFTs, the technology that has since captured astonishing public and media attention. More recent NFTs—like the NFT-based digital artwork by Beeple that sold at Christie’s for $69 million last month—demonstrate the rising importance of these novel digital assets.

Since Crowell & Moring’s initial alert on the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2020, here, the U.S. Copyright Office (Office) has taken a significant step toward implementation of this novel legislation. Specifically, on March 26, 2021, the Office published a notification of inquiry seeking public comment regarding regulations implementing the CASE Act. Initial written comments must be received no later than April 26 at 11:59 p.m. eastern time, while written reply comments must be received by May 10 at that same time. Clients interested in submitting comments on the CASE Act can do so here.

The Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2020 creates a new, inexpensive claims resolution process that may provide copyright holders with previously unavailable recovery opportunities. Copyright holders continuously struggle with the costs of defending their intellectual property rights. Earlier government publications have assessed that while typical infringement claims are valued below $3,000, litigating a copyright case through appeal costs about $350,000 on average. In such cases, there is no monetary incentive to sue, even for obviously meritorious claims. Victims of small-scale infringement should consider whether to utilize this new process, while larger clients should take note of the CASE Act’s unique provisions and should prepare for a potential increase in copyright small claim litigation that was previously cost-prohibited.

The Trademark Modernization Act of 2020, signed into law on December 27, 2020, makes important changes to the Lanham Act including (1) making it easier for a trademark owner who proves infringement to obtain injunctive relief in litigation, and (2) establishing new procedures for challenging applications and registrations that may not meet United States Patent and Trademark Office (“USPTO”) requirements relating to use in commerce.

On November 30, 2020, New York Governor Cuomo signed into law a bill that will allow estates and representatives of deceased individuals to defend their names and likenesses from commercial exploitation, allowing their estates to continue to control and protect their likeness after their death. The new law, which establishes a “Right to Publicity” for deceased individuals who were domiciled in New York at their time of death, allows these individuals to protect their personal characteristics that have commercial value, including their name, picture, voice, or signature, against unauthorized use.

On June 30, 2020, in U.S. Patent and Trademark Office v. Booking.com, the Supreme Court of the United States held 8-1 that “Booking.com” can function as a trademark eligible for federal registration because consumers perceive the term to identify the hotel-reservation services available at that domain name. The Court affirmed the Fourth Circuit holding that the term is not, as the United States Patent and Trademark Office (USPTO) had previously found, “a generic name for online hotel-reservation services.”

The Supreme Court issued a landmark ruling in a trademark-infringement matter on April 23, 2020, holding that willfulness is not a necessary precondition to an award of profits. The unanimous ruling in Romag Fasteners, Inc. v. Fossil, Inc. ends years of uncertainty among the lower courts as to whether willfulness is a prerequisite to awarding profits or whether, as some circuit courts had determined, it is only an important factor to consider. This ruling immediately raises the stakes for trademark-infringement suits, as profits can be awarded even if the defendant claims the infringement is innocent. This expansive ruling may also benefit false-advertising claimants, as false advertising and infringement of trademarks are both governed by Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)), and are governed by the same provisions concerning potential awards of profits.

Last week, the U.S. Court of Appeals for the Federal Circuit, in In Re: Forney Industries, Inc., held that a multicolored mark, when used on product packaging, can be inherently distinctive, and thus eligible for federal trademark registration. The proposed mark consisted of the use of black next to a yellow to red color spectrum as shown below on tools and accessories for welding:

On Tuesday, March 24, the Prime Minister of Japan and the International Olympic Committee (IOC) announced that the 2020 Tokyo Summer Games will be postponed for one year. In a statement, IOC officials said the Games would be “rescheduled to a date beyond 2020 but not later than summer 2021, to safeguard the health of the athletes, everybody involved in the Olympic Games and the international community.” The announcement is likely to set off a wave of claims for refund or contract repudiation to and from frustrated advertisers, sponsors, travelers, entertainers, service and technology providers, and any other entity that planned to participate in the Olympics. This seismic cancellation could well spark substantial litigation, much like occurred in the aftermath of 9-11.

Growing tensions in the world of college sports have recently come to a head. For years, the institutions in college sports have profited from the fame and notoriety of college athletes while the athletes themselves have been prohibited from direct economic benefit due to NCAA rules. Those days appear to be numbered. On October 29, 2019, the NCAA Board of Governors passed a unanimous resolution allowing student athletes to benefit from the use of their name, image, and likeness. However, no real change is expected before April 2020 because the NCAA working group is still gathering feedback to help formulate a new rule. In addition, individual college athletic conferences have been asked to consider their own potential rules to navigate athlete endorsements. A rule allowing college athletes to benefit from their name, likeness, and image would be valuable for advertisers and brands that have long sought endorsement and sponsorship deals with college athletes. Media companies and broadcasters would benefit from deals with college athletes as well.

Digital ad fraud costs advertisers billions of dollars every year. In 2017 alone, digital ad spending reached $209 billion worldwide; however, experts suspect that anywhere from $6.5 billion to $65 billion of that spend was stolen by fraudsters without consequence. But now, the U.S. Department of Justice (DOJ) has issued a warning shot, unsealing last month a 13-count indictment against eight Russian and Kazakhstani individuals for their alleged role in masterminding and operating two large ad fraud schemes—better known as “3ve” and “Methbot.” According to the DOJ release, these individuals allegedly stole more than $35 million in ad revenue using “sophisticated computer programming and infrastructure[s] around the world to exploit the digital advertising industry through fraud.” Does this enforcement action really signal the death knell for digital ad fraud or merely mark the start of a new phase for ever-evolving cybercriminal strategies?

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Anyone plugged into the continuous stream of news from Washington, D.C. knows that the Trump Administration is facing a shortage of political appointees confirmed and installed in Executive Branch departments and agencies. As of June 23, 2017, more than 150 days into the president’s term, of the key positions that require Senate confirmation, 36 have been confirmed, and 81 nominees have been sent to the Senate but not confirmed. In comparison, by June 23 of 2009 and 2001, respectively, 134 appointees had been confirmed and 104 sent but not confirmed in the Obama Administration, and 105 appointees had been confirmed and 108 sent but not confirmed in the Bush Administration.1