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VELCRO: Call me “Hook and Loop?”

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velcroVelcro BVBA, makers of the famous “VELCRO” brand hook and loop fasteners, have taken a humorous and effective stab at trying to assure that it retains trademark protection for that mark. Its concern is that people are referring to all “hook and loop” fasters as “Velcro” when, if fact, they are not manufactured or licensed by Velcro BVBA. Under US trademark law, if a name becomes the common descriptive name of a product (called genericness) it loses its trademark protection. Among the well-known product names that have fallen victim to becoming generic (at least under US trademark law) are the following: Aspirin, Cellophane, Escalator, Trampoline, Thermos, Dry Ice, Kerosene, Laundromat, Linoleum, App Store, ZIP Code, Zipper and TV Dinner.

Among those that are in danger of becoming generic (in the US) are the following: Styrofoam, Teflon, Q-Tips, Sharpie, Tupperware, Astro-Turf, Band-Aid, Bubble Wrap, ChapStick, Crock-Pot, Fiberglass, Formica, Frisbee, Kleenex, Lava Lamp, Memory Stick, Plexiglas, Popsicle, and, yes, VELCRO.

In an effort to educate the public and to retain trademark protection for VELCRO, the owners of the mark have posted this very funny and very effective video.

YOU MIGHT NOT LIKE THIS, BUT: The Supreme Court Rules that Trademark Registrations Cannot Be Barred Because Offensive

YOU MIGHT NOT LIKE THIS, BUT: The Supreme Court Rules that Trademark Registrations Cannot Be Barred Because Offensive

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The U.S. Supreme Court has reminded us again that the First Amendment’s protection of free speech includes speech that might hurt your feelings. In a unanimous decision after a two year litigation battle, the Court just held that the provision in the Lanham Act (the Federal trademark registration statute) that barred registration for marks that are “disparaging” is a violation of the First Amendment’s protection of free speech.

This case, Matal v. Tam, was brought by the band “The Slants” (whose members are of Asian descent) after it was denied a Federal trademark registration on the basis that its mark was disparaging to people of Asian descent.

Slants

While the specific case involved the band’s efforts to secure a Federal trademark registration for “THE SLANTS,” this case was most closely watched because of a separate case presenting the same issue which was brought by the National Football League’s Washington Redskins. The Redskins alleged a similar violation of its constitutional rights of free speech after the United States Patent and Trademark Office cancelled the US Registrations for various “REDSKINS” marks pursuant to that same PTO rule. The Supreme Court’s ruling in the Matal v. Tam case effectively will end a longstanding effort by Native American activists to cancel the team’s registrations in order to pressure the team to change the name.

Under US trademark law, trademark rights (called “common law rights”) are acquired and maintained through use of a mark in connection with a given good or service in the geographical area of use. Those rights are not dependent on having a Federal registration.  However, having that registration affords significant benefits, including the right to preclude others from adopting and using the same or a confusingly similar mark anywhere else in the United States.  Arguably, the Washington Redskins, due to its extensive nationwide use of the “REDSKINS” marks, already has common law rights that extend everywhere in the US.  Still, this decision will make it easier for the team to pursue infringement remedies and, more important, sets a new precedent for how the PTO must examine and evaluate these types of controversial marks.

The Lanham Act’s Section 2(a), which provides that marks which are “disparaging” may not be registered, has been law since the Lanham Act’s enactment in 1946. When previously challenged on constitutional grounds, the courts had long ruled that it didn’t violate the First Amendment because it doesn’t actually bar use of the offending mark, only its Federal registration, nor does it prevent the owner from enforcing common law trademark rights.

The Court disagreed. Justice Samuel Alito, writing for the Court, stated that the disparagement clause amounted to discrimination based on unpopular speech: “We now hold that this provision violates the Free Speech Clause of the First Amendment. It offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.”

Lawyers for the PTO had argued, among other things, that the “disparaging marks” registration prohibition amounted to “government speech.” The Supreme Court has ruled in the past that “government speech” is not subject to First Amendment scrutiny. For example, the court recently ruled that it was permissible for the State of Texas to refuse to issue Confederate flag license plates.

The Court was not persuaded by that argument and called it “far-fetched.”

While the Court made it clear that offensive marks are free speech, the consuming public also is free to respond with its own free speech, by refusing to support companies or organizations whose marks are offensive to them. Thus, while The Slants and the Washington Redskins may have won the legal battle here (and I agree with the decision on First Amendment grounds), consumer and other legitimate market pressures to drop those names (and other similar marks such as the Cleveland Indian’s use of its “Chief Wahoo” logo) may force the owners of those marks to rethink their use.

SPINAL TAPPED OUT: Harry Shearer’s Lawsuit is No Laughing Matter

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spinal-tapFor many of us, This is Spinal Tap remains the benchmark (if not the first great example) of the so-called “Mockumentary” genre of film. Since its first release in 1984 (it had a subsequent theatrical release thereafter) to critical acclaim and commercial success, it has become one of those films that its fans watch over and over—each time gleaning some new subtlety missed during the first dozen viewings.  The film, about a fictitious British rock band named Spinal Tap, starred Michael McKean, Harry Shearer and Christopher Guest, who would later become the “King” of Mockumentaries with his films Waiting for Guffman, Best in Show and A Mighty Wind.  It was co-written by Messrs. McKean, Shearer and Guest, along with the film’s Director, Rob Reiner. Not only did the film contain inspired comedic bits, it included an album’s-worth of original songs, co-written by McKean, Shearer and Guest.

Filmed on a shoestring budget of approximately $2.25 million, it is considered an “important film” by those who decide such things including the National Film Registry of the Library of Congress and The New York Times, as a culturally, historically and aesthetically significant film.  As for me, I just think it is funny as hell.

Not only has the film had two theatrical releases, but it was also released in a wide variety of home video formats and editions and has spawned merchandise sales.  In fact, the photo that accompanies this blawg post is a Tap action figure from my own personal collection of the three figure set.

The four co-creators, individually or through personal loan-out corporations, formed an entity called Spinal Tap Productions (“STP”).  In 1982, STP signed an agreement with Embassy Pictures for producing, financing and distributing the film. In return, STP was to receive fixed, deferred and contingent compensation for their services, as well as a 40% profit participation based on all sources of revenue from the film, including merchandise and music. Through a series of sales of rights, the current owner of the rights to the film, and the party now responsible for making payments to STP, is the large Italian media conglomerate, Vivendi.

Last week, Shearer filed a lawsuit against Vivendi and one of its operatives, Ron Halpern, alleging that they have engaged in fraud and have committed breach of contract.  The suit also alleges that Vivendi did not properly protect the trademark “SPINAL TAP” (even allowing a beer company to trademark the name for use in connection with beer without any opposition from Vivendi). Apparently, Shearer’s patience did not “go to 11,” and he has had enough.  While Tap has been a huge hit and has spawned all sorts of merchandise since its original release, Vivendi claims that it has not made money. According to Vivendi, the four creators’ share of total worldwide merchandising income between 1984 and 2006 was roughly $81. Between 1989 and 2006 total income from music sales was $98 (ninety-eight) dollars. Over the past two years, Vivendi has failed to provide accounting statements at all.  Shearer’s response was to file the lawsuit, seeking $125,000,000 in compensatory and punitive damages.

Shearer’s suit alleges that Vivendi’s accounting practices have been used to offset revenues from the film with losses from other films with which it has been “bundled” (among other nefarious practices).  For example, if a distributor were to approach Vivendi about purchasing $1,000,000 worth of Tap home video units, Vivendi could bundle 19 other films (all of which are money losers) with it and offer the entire twenty film package for $1,000,001.  That way, it can continue to claim that it has not generated $1,000,000 of revenue for Tap, but rather 1/20 of that.  Other losses could be allocated to it and—voila—there are no profits to show.  The suit also alleges that merchandising and music sales profits similarly have been cross-collateralized against other losses.  The net result–$81 in merchandise and $98 in music sales.

Shearer’s Complaint in the lawsuit also states that Shearer is “concurrently filing notices of copyright termination for publishing and recording rights in Spinal Tap songs he co-wrote and co-recorded, as well as the film itself.”  Under Section 203 of the U.S. Copyright Act, the exclusive or nonexclusive grant of an assignment or license of all or any portion of a right under copyright may be terminated at any time during the period of five years beginning at the end of the thirty-fifth year from the date of the execution of such assignment or license. Assuming the agreements in question were executed in 1982, that five year period would begin in 2017.  However, it should be noted that this “termination right” does NOT apply in the case of “works made for hire.”  Under the Copyright Act, a “work made for hire” consists of 1) works created by employees within the scope of their employment; or 2) works created by non-employees that are specially ordered or commissioned for use as a contribution to certain kinds of works (these include motion pictures), but only if there is a written agreement to that effect.  In this case, since the original contracts with Embassy Pictures have not been made available, I am not sure if the rights were merely licensed to Embassy Pictures or, instead were treated in the agreement as “works made for hire.”  This point will be critical to Shearer’s stated goal of getting his copyrights back.

I will post a follow up to this blawg post as the case progresses.

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