The New York Times Sues the Maker of ChatGTP and Microsoft for Copyright Infringement

On December 27, 2023, the New York Times filed a lawsuit in the Southern District of New York for federal copyright infringement against both OpenAI, maker of ChatGTP, as well as Microsoft, an investor of ChatGTP and creator of their own artificial intelligence platform. The lawsuit alleges that the companies’ AI chatbots have been using The Times’ copyrighted material in their automatic collection of internet data (scraping) to produce content, as well as to train the AI language models. The parties had been negotiating a settlement, but that fell through.

Microsoft and OpenAI have previously claimed that their use of the copyrighted material is Fair Use. Fair Use is a common defense to copyright infringement, which contends, generally, that the copyrighted material is transformed into a new work, by changing its purpose. A typical example of fair use is a parody or educational use.

Preempting that Defense, The Times pointed out in its complaint that “there is nothing 'transformative' about using The Times's content without payment to create products that substitute for The Times and steal audiences away from it.”

The newspaper estimates that their damages are in the billions.

Is Your Trademark Too... Weak? All About Generic, Suggestive, Fanciful and Arbitrary Trademarks, and Which One You Should Aim For

Depending on a trademark’s strength, it might not be protectable. Take a quick look at these rules before you pick a name for your brand.

In order to qualify as a trademark under US law, a brand name must be distinctive and serve as a “source identifier.” In other words, a consumer would have to be able to look at the branding and know which company is offering the goods or services.

Taking this into account, trademarks fall on a spectrum ranging from weak to strong, categorized as either generic, descriptive, suggestive, arbitrary, or fanciful. When it comes to federal registration at the United States Patent and Trademark Office (“USPTO”), generic and descriptive brands are rarely acceptable, whereas suggestive, arbitrary, and fanciful brands usually are.

Let’s look at these categories in more detail, so you can decide where on the spectrum your trademark falls.

A trademark is generic if it is a common name for an item or service, such as car, coat, or hat. The prohibition against registering a generic trademark is understandable, since we all use these words every day and it would be unfair for someone to be able to monopolize them!

Another challenging type of trademark is a descriptive one. A perfect example of a descriptive trademark would be using the word creamy as a yogurt brand – notice how the word creamy directly describes a “quality or characteristic” of the product. Luckily, under certain circumstances, you can develop rights to this type of trademark. If, say, the brand name is a little more complex than the creamy example, you can likley “acquire distinctiveness” through consistent, exclusive and frequent use.

One step up from there, are suggestive trademarks. Suggestive trademarks are the weakest of the strong trademarks and, as the name suggests, suggestive trademarks suggest a quality or characteristic of the goods or services, but do not describe them. The analysis is somewhat vague, but a trademark is suggestive and not descriptive if a consumer would not immediately know what the goods or services are, when they see the brand. Examples include “Microsoft” for microcomputer Software and “Netflix” for an internet-based streaming service for movies (aka “flicks”).

The strongest trademarks are fanciful and arbitrary trademarks. Fanciful trademarks are words that are completely made up, like Kodak, Lexus, and Exxon. An arbitrary trademark would be a common word, that is used on an unrelated good or service, such as Apple for a computer, Dove for soap and Coach for purses.

If you think your brand name might be a weaker trademark, or you received an Office Action from the USPTO calling it generic or descriptive, don’t give up just yet. There are a number of creative options we can use to defend and bolster your rights.

Stemer Law's Sarah Stemer Quoted In Law360 Article, In Response to IP Trolls

The article entitled ‘We’re Not Trolls,’ Bong Co. That Filed 850 IP Suits Tells Judge” can be accessed here.

Indeed, a Bong Company filed about 850 federal trademark infringement and counterfeiting cases in various districts around the country, including 45 in the District of Colorado. Unfortunately for Plaintiffs, both Stemer PA and the District of Colorado caught wind of the mass of filings. In response, Federal Magistrate Judge Neureiter issued an Order to Show Cause admonishing that problems seen in other similar filings “will not be tolerated in the District of Colorado.” The Order also set a hearing requiring Plaintiff’s counsel and a corporate representative of Plaintiff to appear in person, which took place last Tuesday.

Stemer, PA represents two of the Defendants in two different cases, so I appeared in person at the Federal Courthouse in downtown Denver. First, the Plaintiff’s attorney took the podium to explain their position. Notably, he claimed he had never heard of what an IP troll is, then proceeded to call the owners of the mom-and-pop smoke shop Defendants, who maybe sold a handful of counterfeit products on accident, “scofflaws” and “ne-er do wells” who are part of a “criminal enterprise.”

In response, I took the podium and explained that, among other things, “filing a complaint with copy-paste complaint allegations and then robo-filing them is pretty much the definition of what a troll does," which was reported in the Law360 article.

I meant every word.

I agree that it was, as another Defense attorney said as he left the courtroom, “one of the funnest days in court I have ever had.” Joking aside, these are serious matters for defendants and it is my hope is that we are back on track to litigate toward a justifiable result. While it is our fundamental belief that everyone should have equal access to the legal system, no one should be allowed to abuse it.

Well, Adidas Filed an Opposition against Black Lives Matter: A Quick Note about Choosing Your Battles

It’s not everyday that we see such newsworthy activity in the Intellectual Property world.

Last week, adidas, AG, adidas International Marketing BV (“Adidas”) filed an Opposition in the Trademark Trial and Appeal Board (“TTAB”) against registration of an application filed by Black Lives Matter Global Network Foundation, Inc. (“BLM”).

The BLM logo that Adidas objected to is quite literally BLM’s logo. Here it is, in case you need a refresher:

According to Adidas, that logo is so similar to the Adidas “Three Stripe” logos, that it will likely cause consumer confusion as applied to certain goods and services listed in BLM’s application. The alleged offending goods include apparel and bags, which, given the magnitude of trademark protection that Adidas has over that type of product, might be a loosely plausible argument. Unfortunately, Adidas did not stop there. They also said that BLM should not be able to register their logo for “Promoting public interest in and awareness of topics of interest to those in the fields of activism and community organizing in the Black community…”

Not a good look.

Whether you are an international corporation, mom-and-pop shop, non-profit, or individual person, you should have the right to enforce your trademarks. However, corporations and their attorneys need to be increasingly more careful about the message they are sending.

Social media is changing the game - court filings and threatening correspondence can be shared at the speed of light, by nearly anyone with internet. Gone are the days when you can simply copy and paste a cobbled-together argument and send it out without second thought.

Public outcry can sink generations of goodwill in one 24-hour news cycle. Even if you set aside personal morals and remain pragmatic, that goodwill is something to keep in mind.

As for the Adidas debacle, not surprisingly, they dismissed the Opposition two days later. Two days too late in this law blogger’s opinion.

18 Reasons You Should Register Your Trademark

Consulting with business owners and clients over the years, I have noticed that a lot of people delay filing an application for registration of their trademark. Some even actively avoid it. After all, there is no requirement to register a company or brand name, and the process can seem intimidating and costly. Regardless, there are several reasons to file an application for registration of a trademark in the US Patent and Trademark Office (USPTO).

1. It will act as a deterrent. Registration of a trademark will act as a deterrent against someone else developing or using the same or a similar trademark. Details regarding a registered trademark are easy to find on the USPTO database, so most anyone developing a brand can find your registration, prompting them to choose another name. Seeing a brand or company on the registry will let someone know that you are serious about your brand and intend to protect it.

2. It is easier to stop an infringement. While brand owners, both registered and unregistered, have recourse against infringement of their trademark, approaching an infringer with a registration in-hand makes stopping them a lot easier. Generally, the first step in stopping an infringer to send them a Demand Letter or Cease and Desist Letter. The stronger the letter, the more effective the letter is. It goes without saying that having a registration makes the letter stronger.

3. Retail anti-infringement services and Brand Registration. Online retailers such as Amazon.com or Alibaba.com actively monitor for infringement and counterfeiting. They also allow trademark owners to submit notifications if they identify infringing activity. Activation of and participation in these services requires a trademark registration or application. The much sought-after Amazon Brand Registry will look for a national registration or application before including you in their roster.

4. Social Media anti-infringement services. Meta FKA Facebook and Instagram have similar services, where if you send them a registered trademark, they will quickly remove infringing posts or activity.

5. US Customs and Border Patrol (CBP) registry. Trademark owners can place their trademark on the US customs registry. This is a free service by the CBP, where they will monitor shipments into the US, checking for counterfeit goods. The CBP will place only registered trademarks into their registry.

6. Access to ICANN’s UDRP. A valuable resource available to trademark owners, especially as internet marketing and retail becomes more important, is ICANN’s Uniform Domain Name Dispute Resolution (UDRP). If you are, say, a clothing retailer and someone is selling counterfeit goods on a webpage similar to your trademark, ICANN can require the domain registrar to transfer ownership of the infringing domain to you. This service is only available for registered trademarks.

7. It will make your company more valuable. A company with a book of registered intellectual property will include that in their valuation. Whether you keep your company closely held or grow it to IPO, there will likely come a time where a higher company value leads to money in your pocket. This could come up when you selling your company to retire, bring in a partner along the way, or if you are simply growing the company as an investment buyer.

8. It will be a selling point to investors. Having registered trademarks, especially for your brand name, makes your company more legitimate, safer from competitors and, as explained in point 7, creates a higher value. This all in turn attracts investors and makes them feel safer to invest.

9. It may end up costing you less. While filing a trademark application is certainly more expensive than using an unregistered trademark, the cost of protecting an unregistered trademark can prove far more costly. Between USPTO fees and attorney’s fees, the cost of registering a trademark can range anywhere between $1,200 and $3,500. On the other hand, owners of unregistered trademarks can find themselves filing Trademark Trial and Appeal Board proceedings to stop someone else from registering their unregistered trademark. That can cost anywhere between $5,000 to $150,000 or more (more on the TTAB below).

10. Easier Access to the TTAB.  The TTAB is best described as a hybrid between a traditional US court and an arbitration board, where trademark owners can file Opposition and Cancelation proceedings. While access to the TTAB is also available to owners of unregistered trademarks, the presumption of validity that comes with owning a registration is beneficial (which brings me to my next point).

11. Presumption of validity. In any type of legal “fight,” the importance of a presumption of validity cannot be overstated. Not only is it easier and less time consuming to prove something that is assumed true, it will also leave the other party with the hefty burden of proving that your registration is invalid. Without a trademark registration, it will be your burden to prove you have trademark rights.

12. Licensing and contract enforcement. A common way to profit from your brand or intellectual property is to “lease” it to others through a licensing agreement. Having a registration helps define the terms of the agreement, outlines exactly what they are using, and helps to enforce it if anything goes wrong.

13. To help prevent “generi-cide.” Under US law, for a word, phrase, or logo to qualify as a trademark, it must not be generic. Even where a trademark starts off as unique, it can become generic through common use. Popular examples of that include “Kleenex” for tissues and “Escalator” for moving stairs, which were both once registered trademarks. Legally, generi-cide can be prevented if a trademark owner takes steps to protect their trademark (like “Velcro” has, for their brand of hook and loop closures). This type of protection is next to impossible without a registration.

14. Protection for your product once your patent expires. Once a patent expires, a trademark can help a trademark owner retain their customer base through the goodwill and trust that comes with the brand. In fact, it is sometimes the only intellectual property left for an invention-based venture. One of my favorite examples is with the toy brand, Lego. When their building block patent expired, the imitators were so successful that Lego almost went out of business. However, they managed to get past the initial blow and stayed afloat with the help of their trademark.

15. Use of the Circle-R logo. While there is technically no legal value for using the Circle-R logo, it just looks more official. Heads-up, though, using the Circle-R on an unregistered trademark is a big no-no.

16. Priority date. An argument over who owns a trademark ultimately rests on who filed an application first or who started using it first. While US trademark rights are based in use, an individual who has imminent plans to use a trademark can by filing an application on an “intent-to-use” basis. Because application date and use date is on equal footing, applications for registration of a trademark can be a great tool to secure your brand before it is fully developed. This is especially true for foreign companies just breaking into the US market. For applications based on foreign priority, there is an assumption of use at the time priority is established. In fact, owners of trademarks that are subject of applications with a foreign filing basis do not have to show use until 5-6 years after registration.

17. Incontestibility. After 5 years of registration, a trademark owner can file a Declaration of Incontestability under §15. Once this filing is accepted, the trademark will defeat even someone who started using the same or similar trademark well before them.

18. In rare cases, you could lose it. Albeit rare, a nightmare scenario would be if you end up on the other side of the scenario in point 17. Say you use your trademark for many years without filing an application, and in the meantime, unbeknownst to you, someone with a similar brand is about to file for incontestability. You will no longer have superior rights to them and they could force you to stop using your trademark.  

As you can see, the reasons for registering a trademark are compelling. For a growing or stable company, prioritizing the protection of your intellectual property rights is paramount. For more insight into the process, contact our firm for a free consultation.

They Might Look Fly, But This Probably Wouldn’t Fly In An Infringement Lawsuit

The Japan Patent Office (JPO) recently registered a trademark for the brand name CUGGL in logo form in International Class 25 for apparel. Here is an image of the logo in Registration No. 6384970.

As you can see, the logo is pretty inoffensive. The words CUGGL appear in all capital letters, with a pink paint streak covering maybe 1/6th of the bottom of the letters.

But all is not what it seems. Applicant, Nobuaki Kurokawa, owns a company that sell shirts bearing a similar logo, with one minor difference - the pink paint streak is higher up. So high up in fact, that what you see looks a lot like it says “GUCCI.” Check it out:

Enter Gucci.

Not surprisingly, the fashion giant filed an Opposition to registration of the CUGGL logo. They argued that the CUGGL logo should be blocked from registration, because it was too similar to the Gucci trademark, and that Kurokawa was doing it on purpose.

The ins and outs of analyzing whether two trademarks are too similar is different in every jurisdiction, but the general theme is usually the same. If the trademarks, as applied to the goods or services, are such that a consumer would likely think the goods or services come from the same source, then they are too similar.

The fact that the JPO allowed this trademark might, at first blush, seem bizarre, but the JPO’s hands were tied. Examiners and Opposition boards are tasked with comparing a trademark as it appears in an application, not as it appears elsewhere. Sure, circumstantial evidence is also considered, but in this case, the JPO found that it simply did not outweigh the dissimilarity of the trademarks.

That being said, an infringement lawsuit would probably go a little different. While the logo in the Application does not look like it says Gucci, the logo on the shirt certainly does. The court would be able to compare the logo on the shirt with the Gucci trademark, rather than be restricted to comparing it only to the logo in the Application.

If Gucci took the next step and filed, it would not be Applicant’s first fight. Kurokawa’s company makes a habit of selling apparel with designs that look suspiciously like other fashion brands. That would support the argument that the infringement was intentional, something the court can look at too.