April 2012

The Ober|Kaler patent litigation team recently won a significant victory for its clients in Maryland federal District Court. We were able to keep a patent infringement suit in the local federal court despite our opponent’s multiple attempts to have the case transferred to its home state of Florida. The latest gambit by our opponent was based on its claim that our clients did not own the patent at the time the lawsuit was filed. While the court’s ruling marks a significant victory for Ober|Kaler and its clients, the decision also provides a valuable lesson for employers in an area of the law that Justice Breyer of the United States Supreme Court called “a technical drafting trap for the unwary.” (more…)

McCormick Grill Mates Chipotle Marinade

Arby's Chipotle Chicken SandwichMcCormick Grill Mates Chipotle Marinade…neck to police. Just ask Chipotle Mexican Grill which is receiving some mild ridicule from numerous trademark blogs for its recent suit against Kroger supermarkets. Chipotle Mexican Grill accuses Kroger of trying to profit from and trade off of the goodwill that the restaurant chain has developed in its brand by selling ready-to-eat chicken entrees in its supermarkets with a label that reads “Chipotle Spicy Fried Chicken.” As any burrito fan and virtually everyone else knows, a chipotle is a smoke-dried jalapeño pepper commonly used to flavor Mexican and Tex-Mex food and, consequently, the word is commonly used to describe dishes so flavored. Therein lies the problem with policing descriptive marks. Even if a mark is registered and well known, a trademark owner cannot stop others from using ordinary words to describe their own products. This “descriptive fair use” defense is codified in our trademark laws (at 15 U.S.C. § 1115(b)(4)) and applies, according to the U.S. Supreme Court, without regard to whether or not some consumers may be confused. KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004). As a result, the Arby’s restaurant chain can sell a chipotle chicken sandwich and the McCormick spice company can sell a chipotle chicken marinade without infringing any trademark rights. Anyone who has been to the supermarket recently knows that there are scores of chipotle flavored products available.

 So Chipotle Mexican Grill was foolish for picking on Kroger, right? (more…)

The US Patent and Trademark Office wants to know. In conjunction with the National Institutes of Standards and Technology, the USPTO is offering an online “Intellectual Property Awareness Assessment”, e.g., a pop-quiz designed to test your IP acumen. http://www.uspto.gov/inventors/assessment/.
The quiz is 62 questions long, takes 20-30 minutes, and covers several basic IP categories:
• Trademarks
• Copyrights
• Design Patents
• Trade Secrets
• Utility Patents
• Using Technology of Others
• Licensing Technology to Others
• International IP Rights
The survey-like questions are pretty basic, such as “Do you provide training to your employees to help them identify inventions they or their colleagues make?” Results are provided, and remedial training materials are available in case you slept through your first-year law classes. Over-achievers shouldn’t expect advanced questions on plant patents, semiconductor chip protection, vessel hull design protection, etc., and under-achievers can probably get by on pure instinct. Nevertheless, I applaud the nice outreach effort by the USPTO/NIST, and the metrics should provide needed feedback as to whether they are passing/failing their own mission statement which includes “delivering intellectual property information and education worldwide.”

Creative Alliance Gives Scott Golden Formstone

Creative Alliance Gives Scott Golden Formstone
Mark Steiner awards Golden Formstone to E. Scott Johnson

Baltimore’s Patterson Theater was packed Saturday evening for the Creative Alliance’s Grand Marquee Ball. Costumed patrons jostled for position as the CA honored E.Scott Johnson and Terri Rubenstein for their unflagging support for the arts in Maryland.

Dressed as a mad hatter, Mark Steiner of WEAA bulleted Scott’s most recent arts accomplishments– reviving Maryland’s film incentive program which immediately netted three top shelf TV productions for Maryland including VEEP, House of Cards and Game Change, bringing back Maryland Volunteer Lawyers for the Arts, and leading the Maryland State Arts Council. Among Johnson’s many accomplishments mentioned by Steiner are his background as a session musician, losing gear to a sunken recording studio barge, and voting every year as a member of The Recording Academy. 

 

In the post-Bilski/KSR/Prometheus regime patents are unquestionably a costlier and riskier investment. Statistics confirm this. Fifty percent of patent applications are abandoned these days, as opposed to only thirty-five percent in 2004. Paying more to prolong prosecution (via request for continued examination) restores the odds of success, but at a price. [USPTO statistics at www.uspto.gov/dashboards/patents] Even after the patent is awarded, of those subsequently litigated roughly 40% are declared invalid in court, many falling prey to the judicial shifts in patent law. Place all that against a backdrop of a relatively slow recovery from a relatively deep recession, and lingering cutbacks in research and development investment. A sage investor might have predicted a drop-off in patent filings, but just the opposite has happened. U.S. patent filings have increased steadily in recent years, and international patent filings have increased dramatically. Why? The Constitutional purpose of our patent system is to create incentives for innovation, and patent budgets have historically tracked R&D budgets. However, there are recent dynamics that disassociate the two. Patent trolling (by companies seeking only to profit from lawsuits) is on the rise. Reports estimate that there were five times as many patent trolling lawsuits in 2010 than in 2004. [Patent Freedom 2011] Defensive patent aggregation (to mitigate the risk of litigation from patent trolls) is on the rise. The number of U.S. patents granted to foreign companies and individuals is on the rise, exceeding the 50% mark in 2009 and continuing to date. [IFI Patent Intelligence]. Is the U.S. patent system broken? No, but she moves in mysterious ways and the statistics surely bear closer watching. The USPTO is beginning to take an active role in this, having established the Office of the Chief Economist in March 2010, and appointed Dr. Stuart Graham as its first Chief Economist. A few days ago the USPTO jointly released an ambitious report that directly or indirectly attributes forty million U.S. jobs to intellectual property: Intellectual Property and the U.S. Economy: Industries in Focus. http://www.uspto.gov/news/publications/IP_Report_March_2012.pdf  The report will convince you that the U.S. economy hinges on intellectual property. The only thing lacking is what to make of it? I’m already looking forward to the sequel.

Maryland–cutting edge? After a contentious end of session, Maryland became the first state in the U.S. to pass a law prohibiting its employers to demand social media account information from current or prospective employees. April 9th’s Sine Die (the session is “without days”) dragged into a stalemate early Tuesday, forcing Maryland to pass a Doomsday Budget requiring massive funding cuts in vital state services like education.

Imagine our delight to discovered an a hidden easter egg–Senate Bill 433 which forbids Maryland employers and their HR people from requiring or requesting social media names and passwords from employees or prospective hires.  It is understandable that employers dislike surprises and that “inside information” often reduces the likelihood of surprises.  However, as the Baltimore Sun reports, the bill’s sponsors rightly likened such practices to eavesdropping on private telephone calls. Have you checked out your HR Policy to see if your folks are running Facebook checks? Even without requiring a password it might seem “creepy” to your employees.

My law students would be interested in discussing whether Maryland’s law could extend to similarly invasive practices by NCAA coaches. In some ways an NCAA athlete’s situation is akin to that of an employee or intern. The New York Times ran a piece a couple weeks about some colleges that require athletes to provide access to their Facebook or Twitter accounts, either by downloading software to monitor them or simply requiring that they let a coach, an administrator or a third-party company “friend” them on Facebook or follow them on Twitter.

Does one have a reasonable expectation of privacy on Twitter or Facebook? Perhaps not on a person’s public pages, but one would expect to have privacy in private portions of social media accounts. (Another reminder to finetune #privacy_settings!) But using monitoring software to track athlete conduct online is not only creepy, it could run afoul of anti-stalking laws.

The Wall Street Journal has an article about Apps this morning.  The paper has done a great job of revealing the so-called seamy underbelly of the online advertising world. Today the theme is that Facebook apps exploit users (and make Facebook million$) by collecting bits and pieces of personal data, details that alone do not personally identify the user, but collectively tell ad brokers and advertisers what you are most likely to purchase next. Boom the correct ad is served to you. Convenient or creepy?

The unconstrained collection of digital data is stirring feelings of distrust among some users. “Consumers are being pinned like insects to a pinboard, the way we’re being studied,” said Jill Levenson, a creative project manager at Boys & Girls Clubs of America in Atlanta. She recently deleted nearly 100 apps on Facebook and Twitter, she said, because she was uncomfortable with the way details about her life might be used.

via Selling You on Facebook – WSJ.com.

Collecting personal data is creepy but not invasive.  Data collection by apps is largely consented to by users. Actually invasive is when journalists from News of the World and other News Corp papers (of which WSJ is one) hack voicemail so they may divulge salacious personal details which, by the way, also sells advertising.

Farmville, FourSquare, Girls Around Me, Instagram, etc. ask you if you want to share your contacts, relationship details, etc.  Don’t get angry with Facebook, just don’t click through and accept such requests without thinking. You have the power!

 

Stalking Apps: Creepy or Invasive? Understanding Social Media Data Collection is Key

IAB Consumer Privacy Campaign

Creepy!?? Is that how consumers would describe your online advertising? Maybe not, but regulators are clearly creeped-out by the amount of consumer data collected online and the ability of data aggregated to collect or discern information that many would consider private. Over the past weeks and months, several privacy stakeholders have issued guidance for best practices in online privacy and new light has been cast on developments in the state of online privacy.

For example, the Digital Advertising Alliance launched an ad option icon program for advertisers and consumers that lets consumers “conveniently opt-out from [some] online behavioral ads,” the FTC entered consent into orders with Facebook and Google regarding user information, Google announced a “single” privacy policy for all Google services, California AG Kamala Harris’ entered a consent agreement with mobile networks regarding applicability of the California Online Protection Act to mobile apps that collect personal data, the White House published a Privacy Bill of Rights, and the FTC issued a its final report on protection of privacy online. Online and offline privacy is coming under increasing scrutiny and businesses need to review their online (and offline) data collection practices, including how they share that data with third party advertisers, and compare their actual practices with what their privacy policies say and what their customers would reasonably think. 

Despite the spotlight on privacy, consumers seem less creeped out than regulators as they continue to surf, post and check-in online, giving Foursquare, Google and Facebook permission to track them for geo targeting purposes. However, last week, a mobile app called ” Girls Around Me” caused an uproar because it displayed the location of girls in the vicinity of the user and offered names and other personal details (such as relationship status) from the women’s Facebook profiles. Internet furor branded the app as a stalker tool… (more…)

Welcome Home Maryland Filmmakers- Our Film Incentive Program is Back in Business

Julie Louis-Dreyfus Is Selina Meyer, Vice President of the United States

Our homegrown film industry was fleeing Maryland in 2011.  Skilled film workers needed film and television production jobs that had moved to states with generous film incentives. Conflicting priorities had reduced Maryland’s ability to offer incentives. What a difference a year makes

Last year Maryland enacted the Maryland Film Production Employment Act of 2011 to provide tax incentives for television and film companies who would produce films and television programs in Maryland. Almost immediately, world class projects, including HBO’s new series VEEP, and Netflix’s House of Cards, set up shop in Maryland. These productions (along with HBO’s Game Change, shot in Howard County), have brought Maryland’s skilled production crews back to Maryland after a long dry spell, and hundreds of Maryland businesses are reaping the benefits.  

According to DBED, the productions that chose Maryland in 2011 account for $185 Million in additional spending, creating 550 new jobs for film crews and actors. Because the program was so successful, the tax credits were quickly exhausted. A new bill, SB 1066, was proposed in Maryland’s General Assembly this Spring. It passed in the Senate unanimously, and is now in the House. Senate Bill 1066 would raise the annual cap on tax credits and extend the sunset, allowing Maryland to keep the outstanding television series it has attracted for subsequent seasons, while keeping the Maryland Film Office’s doors open to new film projects.

While digital piracy continues, major record labels seem to have gotten a handle on making money from digital copies of songs from their music catalogs thanks in large part to the legitimacy conferred on digital music sales distribution by Apple’s iTunes store. Now the labels are finding themselves tripped up by long existing contracts with their artists. Iconic Motown recording artists The Temptations are the latest in a string of artists to end up in court over the terms of their royalty contracts following a 2010 decision in favor of rapper Eminem in a similar case. The issue revolves around whether music distributed through sites like iTunes are considered music sales (in the old model of buying a CD at your local Tower Records) or a license. Before the digital age, artist’s contracts with their label routinely provided the artist with a considerably smaller royalty on music sales revenue as compared to license revenue, ostensibly to compensate the label for the marginal cost of producing another physical disc or tape.

Eminem’s label, Universal Music Group, counted songs distributed by iTunes as traditional sales and gave the artist something likely in the neighborhood of a 15% royalty. Eminem argued that he was due the 50% royalty rate owed him on license revenue according to his contract. The 9th Circuit Court of Appeals agreed with the rapper, finding that UMG’s arrangements with digital retailers resembled a license more than it did a sale of a CD or tape because, among other reasons, the labels furnished the seller with a single master recording that it then duplicated for customers. Now, The Temptations are looking for the same result, going so far to seek class action status for all of Universal Music Group’s recording artists. If certified the class could include names like James Brown, Eric Clapton, Guns N’ Roses, Kiss, Nirvana, The Police and The Who.

The case is captioned and Williams et al. (d/b/a The Temptations) v. UMG Recordings, Inc. (3:2012-cv-01289) in the U.S. District Court for the Northern District of California. A related case on behalf of Otis (Damon) Harris is captioned Harris v. UMG Recordings, Inc. (3:2012-cv-01305).

Hat tip to the Future Of Music Coalition for highlighting the story first reported by the Hollywood Reporter.