Darin M. Klemchuk 1/5/18 Darin M. Klemchuk 1/5/18

Lessons from Urban Outfitters Willful Copyright Infringement Ruling

Avoiding willful copyright infringement

In April 2017, Urban Outfitters and Century 21 were found liable for willful copyright infringement of a fabric design owned by Unicolors, Inc. Unicolors has filed over 60 lawsuits to enforce its copyright registrations in its fabric designs. The trial court awarded $164,400 in damages and $366,910.17 in fees and costs. On appeal, the Ninth Circuit upheld the infringement ruling and agreed with the district court that the striking similarity between the registrations and the accused designs allowed the court to infer that Urban copied the design even thought there was no evidence of Urban having access to the design. Importantly, the Ninth Circuit rejected Urban Outfitters' argument that knowledge is a requirement of willful infringement, holding that reckless was sufficient.

Steps retailers can take that might reduce the risk of willful copyright infringement

The following provides some considerations retailers make take in handling disputes to potentially minimize the risk of a willful copyright infringement ruling:

In the fashion and fabric design industry, designers are often "inspired" by fabric swatches and material on the Internet as well as provided by third parties. Looking for copyright notices is a good step to take to become aware of third-party copyrights. Internal training on what is considered acceptable "inspiration" and design best practices is also a good step. Unlike trademarks and patents, copyright registrations are difficult to search, which makes it difficult for a retailer to complete a clearance search before selling a copyrightable design or product.
Retailers may want to consider outsourcing fabric and product design to third parties and use agreements that include representations and warranties that the third-party designer has appropriate permission for all deliverables. These agreements should also include uncapped indemnity provisions in the event of an infringement lawsuit.
If a cease and desist letter is received, the retailer should consider retaining experienced copyright litigation counsel and take appropriate action. Due to the difficulty in searching the U.S. Copyright Office website, verifying the owner of the alleged registered work as well as a copy of the registration specimen are common first steps in resolving a copyright dispute.

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In addition to Thriving Attorney, Darin M. Klemchuk is founder of Klemchuk LLP, a litigation, intellectual property, and transactional law firm located in Dallas, Texas. He also co-founded Project K, a charity devoted to changing the world one random act of kindness at a time. Click to read more about Darin Klemchuk's practice as an intellectual property lawyer.

Darin M. Klemchuk 1/5/18 Darin M. Klemchuk 1/5/18

Kirtsaeng v. Wiley: Attorney's Fees in Copyright Cases

Kirtsaeng v. Wiley, a Year Later -- Attorney's Fees in Copyright Cases

According to a recent article in Law360, "a year later, experts say the impact of the U.S. Supreme Court’s Kirtsaeng v. John Wiley ruling on attorneys' fees in copyright cases has been clarity and consistency, not a huge change in the ways courts are ruling." That decision was entered on June 9, 2016 and according to the article and the experts interviewed, the decision has not created a sea change in the way district courts are ruling on attorney's fees in copyright cases. Trial courts have focused on the reasonableness or lack of the losing party's position and have been less likely post-Kirtsaeng to award attorney's fees where a party maintained a reasonable position, even though they lost. In Johnson v. Storix, a federal judge in California held that while a losing plaintiff had an objectively reasonable position, he still had to pay attorney's fees.

Future of Attorney's Fees in Copyright Cases

Given the overall message of the Kirtsaeng decision that trial courts should apply their discretion in awarding attorney's fees in copyright cases on as case-by-case basis given the totality of the circumstances, it is not likely that there will be a radical change on how fees will be awarded in the future. However, it's only been a year since the Supreme Court decision, and trends may emerge as federal district courts apply the guidance.

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Darin M. Klemchuk 7/11/17 Darin M. Klemchuk 7/11/17

Popular 1950’s Singer Sues over Song Use in Video Game Ads

Popular 1950’s singer, Dion DiMucci, better known as “Dion,” has filed suit against ZeniMax Media (“ZeniMax”) over use of his famous song, “The Wanderer” in television commercials promoting the popular video game, Fallout 4. Both the film and video game industry often license popular songs for use in promotional materials or even in the final media product itself. Such licensing agreements are often complicated legal agreements and may require different versions for different regions or markets, even if it covers the same licensed materials. For example, Netflix and other streaming services must often negotiate different license rights for each of the different global markets they operate in. As a result, it is also not uncommon for licensing agreements to require the consent of multiple parties or allow for separate addendums or side negotiations.

In the lawsuit at hand, DiMucci claims that ZeniMax illegally used his song “The Wanderer” without his explicit consent. Although DiMucci had contractually agreed to license his song through a contractual agreement with UMG Recordings, DiMucci claims that ZeniMax was still required, by contract, to negotiate with DiMucci before using the song. Specifically, DiMucci claims that the contract concerning “The Wanderer” allowed him to reserve the right to negotiate his own payment terms with ZeniMax. Failure to negotiate with DiMucci allowed him to withdraw consent altogether, if necessary.

As the most recent addition to a well-regarded video game series, Fallout 4 was a highly anticipated release. As such, television commercials showing scenes of a desolate wasteland and an armed protagonist while playing “The Wanderer” were widely released and often played. Fallout 4 is rated M for “mature” due to blood and gore, intense violence, strong language, and use of drugs. As such, DiMucci alleges that the ads and use of his song were objectionable.

In the lawsuit, DiMucci notes that he is not claiming that he would never have licensed the right for use of the song in conjunction with Fallout 4. Instead, DiMucci alleges that the right to negotiate his own terms was imperative because it could have allowed him to procure payment sufficient to protect himself against any loss of goodwill from having the song associated with a violent video game. As such, DiMucci is seeking general damages in excess of a million dollars.

While it is unclear how the court will rule on DiMucci’s claims, it is important to note that the use of popular media (i.e., songs, movies, etc.) in other entertainment works often requires the use of complex licensing agreements. While one party may believe that they have properly licensed a song or movie because of an agreement they are a party to, it is important to conduct due diligence about the asset in order to ensure that other third-party property rights are not violated.

As such, it is imperative for artists and companies alike to hire or consult experienced intellectual property legal counsel before launching massive media campaigns or rolling out final products.

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Darin M. Klemchuk 7/3/17 Darin M. Klemchuk 7/3/17

Intellectual Property Protection for Fireworks

Every July 4th, we celebrate an American tradition with food, friends, family, and, of course, fireworks. While fireworks are generally easy to procure, depending on what state you are in, few know about the surprisingly high amount of intellectual property challenges that fireworks manufacturers and vendors face today. The following discusses the IP challenges as well as forms of intellectual property protection for fireworks.

Google Prohibits Online Advertising for Fireworks

One of the first challenges comes from advertising online. While fireworks are a popular search term online, keen observers might notice that searches for fireworks do not yield top hits for vendors and online stores like most search results would. Similarly, fireworks never appear in targeted or paid ads on popular search engines like Google or Bing.

The reason for this comes from Google’s legal policies. In its AdWords legal policies, Google explicitly states that they will not promote fireworks in targeted advertising because fireworks and pyrotechnic devices are considered too dangerous to promote. As such, Google’s AdWords partners, like AOL, are similarly limited by such policies.

To get around these rules, fireworks advertisers use many creative workarounds. One popular workaround is to spell “fireworks” differently. In some advertisements, the keyword for “fire-works” is spelled incorrectly with a hyphen. Firework vendors also commonly run ads selling “party favors” or rely on consumers to search for their products under specific brand or product names such as “Black Cat” or “Roman Candles.”

In contrast, another intellectual property challenge that is fireworks-related concerns copyrights of firework shows. From the Fourth of July to the Olympics, fireworks often take center stage at large, public events. As such, some artists have attempted to copyright their firework shows.

Responding to these requests, the U.S. Copyright Office states that they will review each request on a case-by-case basis. Because visual arts must be in a tangible medium of expression to qualify for copyright protection, many artists rely on registering copyrights of photographs or video-recordings of their fireworks show. Since the firework display itself is not considered fixed, the fireworks show as a concept is not registerable.

Beware of Copyright Violations in Music During Fireworks Shows

Artists must also be mindful of the music they choose to accompany their fireworks shows. To avoid paying expensive licensing or royalty fees, artists either rely on music in the public domain or work with local radio stations to coordinate musical accompaniment. If the artists rely on a radio station to provide the music, radio stations simply need to adhere to blanket licenses they have already agreed to in order to air the display’s music.

Similarly, many tourist destinations, theme parks, or other fireworks shows rely on using original musical works to accompany their shows. This way, the organizers can avoid paying any type of royalties for the music and dodge claims of copyright infringement.

Patent Protection for Fireworks

Another route commonly used to protect fireworks is patent protection. Several patents have been issued to register the design of specific fireworks. For example, the Walt Disney Company owns several firework patents, including patents that cover distinctive shell configurations. These configurations cover fireworks that create specific shapes or designs in the sky that are representative of the Walt Disney Company.

Trademark Protection for Fireworks

Lastly, trademark registration also provides a popular source of intellectual property protection for fireworks manufacturers. Most fireworks companies pursue registration of specific brands or logos associated with their products to protect their goods from infringement. The real challenge, however, often comes from knockoffs or counterfeit goods from China. Many fireworks brand owners often encounter difficulty with policing their fireworks brands online due to the online ban of advertising on search engines. Similarly, many foreign companies often illegally use trademarked images on their fireworks products but often face little to no repercussion due to the sheer number of fireworks trafficked or sold.

In the end, the practice of selling fireworks faces unique intellectual property challenges. Fortunately, fireworks vendors have a number of solutions available to gain intellectual property protection for fireworks and to help navigate the challenges they face both legally and responsibly.

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