Weekly IP Buzz for the week ending March 8, 2019

March 11, 2019 Darin M. Klemchuk

Here's a summary of interesting developments in intellectual property, technology, social media, and Internet law for the week ending March 8, 2019.

A New Business Strategy for Copyright Owners: Filing Suit for Copyright Infringement

What the Supreme Court’s Fourth Estate v. Wall-Street Ruling Means for Businesses

On Monday March 4th, 2019, the Supreme Court ruled that a copyright owner cannot file suit for copyright infringement until the work in dispute has been granted a copyright registration by the U.S. Copyright Office. This ruling is significant because in many areas of the country—including Texas and California—a copyright owner could bring suit for copyright infringement immediately upon filing an application for registration. Now, a copyright owner must have a registration in hand before running to the courthouse.

What this means for copyright owners is that they need to be more proactive in seeking registrations for their works. In the time it takes to get a registration—right now about seven months—an infringer could divert sales away from the legitimate owner of an otherwise protected work at the most critical time after entry into market. And while the Copyright Office does have a mechanism in place to expedite registrations within weeks for an additional special handling fee of $800, that process may begin to take longer as a result of increased volume due to this ruling. A copyright owner is still entitled to damages for past infringements but cannot file suit for copyright infringement or seek an injunction to stop infringing acts until it has the registration in hand.

Read the full article here.

Supreme Court to Decide Trademark Licensee Rights in Bankruptcy Suit

The United States Supreme Court will hear arguments over whether a trademark license agreement remains enforceable after a trustee’s refusal to honor the agreement upon the company’s filing of bankruptcy.

In Mission Product Holdings v. Tempnology, Mission Product Holdings (“Mission”) and Tempnology agreed to a trademark licensing agreement where Mission would be able to sell Tempnology’s patented and proprietary products in conjunction with use of the Tempnology trademark.

Trademark License Thrown Out in Bankruptcy

Tempnology, however, ended up filing for bankruptcy. In the bankruptcy estate proceedings, the trustee chose to reject the trademark license agreement, relying on Section 365(a) of U.S. Bankruptcy Code, which gives trustees the power to refuse to honor executory contracts. By contrast, Mission argues that the licensing agreement should fall under the many bankruptcy statutory exceptions included in Section 365(a) that allows specific types of contracts to retain specific rights to be exercised. In this case, Mission is liking to draw comparison to courts having allowed patent license rights to be exercised. Tempnology, however, may point out that Congress had, at one point, specifically considered whether to include trademark licenses under the allowable exceptions but ultimately chose not to do so.

Before the Supreme Court, Mission is expected to argue that Tempnology’s rejection and bankruptcy filing should not qualify as legal termination of all existing licensing rights in the agreement. While the lower district courts have ruled in Tempnology’s favor, the Supreme Court has agreed to review the trademark licensing aspects of the suit and hear arguments this week.

Intellectual property attorneys are closely following the case, and amicus briefs have already been filed by a number of high-profile intellectual property organizations.