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China’s New Trademark Law Amendment: Could discouraging squatters detrimentally affect foreign tech firms?

Written by: Brendan Everton

There appears to be good news coming from China for brand owners. The 10th Session of the Standing Committee of the 13th National People’s Congress in China (NPC) has amended the Chinese Trademark Law and will go into effect on November 1, 2019. [1] The changes are meant to help prevent trademark squatting in China, which has long been a problem. [2]

Trademark squatting or trademark piracy is “the registration or use of a generally well-known foreign trademark that is not registered in the country or is invalid as a result of non-use…”. [3] The intent is to “sell the trademark back to the real owner; … distribute products labeling the trademark to consumers who believe the products are real; … exclude the real owner from the market by establishing a claim of trademark infringement; or … use the trademark to market products which are different from those sold by the real owner.” [4]

The Chinese Trademark system is a first-to-file system. [5] First-to-file systems give an exclusive right to the trademark filed first. [6] Consequently, this system results in a race to file, which encourages bad faith filers to take advantage of the system. There are some safeguards in the Chinese regime to fight against trademark squatting. [7] The courts in China have thus far interpreted these protections narrowly making it difficult for foreign companies to protect their trademarks. [8] This is in contrast to the first-to-use system, which gives exclusive rights to the person who uses the mark first. [9] Through the use of this system, countries largely are able to avoid the problem of bad faith filings. [10]

Hoping to resolve this problem, the new amendment moves ever so slightly towards a first-to-use system. Article 4 of the Trademark Law has been amended to clearly state that “applications filed in bad faith without intention to use should be rejected.” [11] This is a significant change which allows the China Trademark Office to weed out bad faith applications during the examination process. [12] Anyone is now empowered to challenge bad faith applications during the examination process at relatively low cost. [13] This will benefit start-up companies who currently do not have the deep pockets needed to challenge the legitimacy of trademarks.  Additionally, trademark agencies are no longer able to represent an applicant if they know the individual is applying for the trademark in bad faith and has no intent to use the trademark. [14] Penalties are applied to both the trademark applicant and agency for violations. [15]

The new system appears to be an excellent start to tackling a problem that has long plagued China. However, some analysts worry the lack of a definition for bad faith may limit the effect that the law could have. [16] Too broad of a definition may harm foreign companies looking to take advantage of the Chinese markets. [17] Including the phrase “no intent to use” has worried some individuals. If this phrase is applied to include foreign firms filing defensive trademarks, it would deny trademarks to companies with legitimate business interests. [18] Unfortunately, the courts in China have been known to side with domestic companies when disputes over trademarks have occurred with American companies. [19]

There is a reason to be optimistic. This is not the only major change that China has made in the last year concerning intellectual property abuse. [20] This suggests that the Chinese government is attempting to improve the climate for foreign firms. There is hope it will attract more foreign companies to the Chinese market, suggesting the courts may start to change course.

While many of the components of the new amendment are encouraging, successfully attracting foreign companies by improving the trademark conditions will require the Chinese government to toe a thin line, allowing international firms to file patents for strategic defensive purposes and preventing bad faith filers from driving foreign business away.

[1] Benny Yip and Catherine Zheng, Good news about bad faith: China amends its Trademark Law, LEXOCOLOGY (June 21, 2019), https://www.lexology.com/library/detail.aspx?g=1add3fb0-713c-4637-9f48-02ffe23be3c3 [https://perma.cc/C9HU-SQ65].

[2] Yip, supra note 1.

[3] WIPO Intellectual Property Handbook: Policy, Law and Use, WORLD INTELLECTUAL PROPERTY ORGANIZATION 90 (2008).

[4] Kitson Sangsuvan, Trademark Squatting, 31 Wis. Int’l L.J. 252, 259 (2013).

[5] WIPO Intellectual Property Handbook: Policy, Law and Use, supra note 2, at 90.

[6] Sangsuvan, supra note 3, at 263.

[7] Yip, supra note 1.

[8] Id.

[9] Sangsuvan, supra note 3 at 262.

[10] Id.

[11] Yip, supra note 1.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] See Frank Ready, China’s Move Against Trademark Trolls Isn’t Sure Bet with U.S. Tech Companies, LAW.COM (July 30, 2019 at 9:30 AM), https://www.law.com/legaltechnews/2019/07/30/chinas-move-against-trademark-trolls-isnt-sure-bet-with-u-s-tech-companies/?slreturn=20190913133554.

[17] Yip, supra note 1.

[18] See Robert Burrell and Michael Handler, Dilution and Trademark Registration, 17 Transnat’l L. & Contemp. Probs. 713, 729 (2008).

[19] Id.

[20] Id.

 

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When Inspiration Becomes Imitation: A Look at Copyright and Trademark Use in Harry Potter-Themed Cafes

Written By: Justine Levy

Sitting in a local cafe in Las Vegas called Bad Owl, I found myself wondering if they acquired licensing rights to one of the biggest franchises in history – Harry Potter. Although the shop was noticeably busy, I could not help but think how pricey that license would cost.

This themed café has distinctive features that anyone familiar with the Harry Potter universe would immediately recognize. Their décor is of owls and magical ornamentation and their tagline is “Serious Coffee with a Hint of Magic.” Those acquainted with Harry Potter will recognize “serious” as an homage to Sirius Black, a significant character in the franchise. Bad Owl also serves a beverage initially entitled “butter beer lattes” but re-branded to “butterbrew” within a year of opening. [1]

When the first location opened, Bad Owl was a sensation, and a media frenzy followed. Their website highlights that they have been featured on Zagat, Cosmopolitan, Fox News, Sprudge, Eater, Thrillist, and PopSugar. [2] I recall seeing videos about the store shared on Facebook by friends and family far from Las Vegas. It is hard to believe that they have avoided the diligent legal watchdogs at Warner Bros. with that level of publicity, unlike the owners of 9 ¾ Café.

9 ¾ Café opened in 2017 in Mong Kok, Hong Kong and differs drastically from the Bad Owl locations in Las Vegas. 9 ¾ Café is less a whimsically inspired coffee shop and more of a literal interpretation of the Harry Potter films. The café is adorned with props from the movie, such as the Gryffindor coat of arms, broomsticks, and wands. There is half of a trolley sticking out from the wall almost identical to the one found at King’s Cross Station in London. And, they sell food and drink items named Professor McGonagall’s Magical Salad, Polyjuice Potion, and Muggle Drink (of which Warner Bros. have trademark registrations on). [3]

Although the restaurant opened in 2017, Warner Bros. only filed suit against the café in January 2019, citing copyright and trademark infringement. [4] It is reported that Warner Bros. is requesting the café change its name and remove the infringing items, damages for use of the copyrights and trademarks, and several injunctions. [5] This is, understandably, not the first time Warner Bros. has pursued legal action against alleged would-be Harry Potter infringers.

For example, in 2009 Warner Bros. shut down a Harry Potter-themed Halloween dinner that was to be held in West London for alleged copyright infringement. [6] Many articles on the story fail to mention the key issue Warner Bros. had with the event – the host Ms. Marmite Lover was selling tickets and charging for the dinner. [7] This means that Ms. Marmite would have been commercializing on the Harry Potter trademark and copyright.

Themed cafes (and dinners) raise many questions about the scope of trademark and copyright protection. How much use of the original material is too much? When does inspiration become imitation? Would a fair use analysis be proper or sufficient for determining boundaries of these cafes?

So, how has Bad Owl avoided a similar fate than that of 9 ¾ Café or Ms. Marmite Lover? It may be because Bad Owl is merely an inspired expression of Harry Potter instead of a literal interpretation.

 

[1] Bradley Martin, Harry Potter-Inspired Bad Owl Coffee Flies to the Southwest, EATER LAS VEGAS (Aug. 7, 2017, 12:00 PM), https://vegas.eater.com/2017/8/7/16104850/bad-owl-coffee-expands-southwest.

[2] BAD OWL COFFEE (Sept. 15, 2019), https://www.badowlcoffee.com.

[3] Coconuts Hong Kong, ‘Harry Potter and the Lawyers of Admiralty’: Wizard-Themed Café Sued for Copyright Infringement, COCONUTS HONG KONG (Jan. 16, 2019, 4:10 PM), https://coconuts.co/hongkong/food-drink/warner-bros-sues-harry-potter-themed-cafe-for-trademark-infringement.

[4] Lianne Tan, Copyright, Trade Marks and Character Themed Cafes, LEGALVISION (Jun. 8, 2016), https://legalvision.com.au/copyright-trade-marks-and-character-themed-cafes.

[5] Hong Kong Harry Potter-Themed Café Sued for infringement, THE COPYRIGHT LAWYER (Jan. 16, 2019), https://copyrightlawyermagazine.com/hong-kong-harry-potter-themed-cafe-sued-for-infringement.

[6] Emma Rowley, Harry Potter and the dinner party of doom, LONDON EVENING STANDARD (Oct. 26, 2009, 11:19 AM), https://www.standard.co.uk/news/harry-potter-and-the-dinner-party-of-doom-6761727.html.

[7] Thom Geier, Harry Potter and the Deathly Lawyers: Warner Bros. blocks a fan’s Potter-themed dinner party, ENTERTAINMENT WEEKLY (Oct. 27, 2009, 3:12 PM), https://ew.com/article/2009/10/27/harry-potter-lawyer-dinner-party.

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Terms of Service and the Erosion of the Right to Privacy

Written By: Elliot Millerd-Taylor

“I wouldn’t want to slow the wheels of progress. But then, on the other hand, I wouldn’t want those wheels to run over my client in their unbridled haste.” [1]

In a set of recent decisions, courts in the Ninth and Tenth Circuit have held that as long as the government stays within the parameters of the intrusions you agree to in the Terms of Service (TOS) with an internet service provider there is no search subject to the warrant requirement or, in the alternative, a reasonable expectation of privacy. [2]

For example, in United States v. Wilson, the court denied a motion to suppress evidence implicating the defendant in the possession, distribution, and solicitation of child pornography because the government’s visual examination of the images turned over by Google did not “significantly expand” on the proprietary technology Google uses to search someone’s email. [3]

Facially, the district court’s decision comports with the majority of Fourth Amendment case law.  However, this surface level appearance masks the troubling implications of the decision.

First, Google’s TOS for Gmail reserves the right to investigate suspected misconduct, review content, and remove or refuse to display content that violates policy. [4] In short, you are not obligated to use or be allowed to use the service if you break the law.

Second, 18 U.S.C. 2258(a) compels Google to turn over “actual knowledge of any facts or circumstances” that indicate a user is distributing, solicitating, or producing child pornography to the CyberTipline of the National Center for Missing and Exploited Children (NCMEC).  This includes relevant identity, geographic, and historical reference material.

Finally, Google goes beyond 18 U.S.C. 2258(a)’s requirements. Google uses a proprietary hashing technology to identify possible violations which are then manually identified by trained employees who catalogue and assign a hash value to the image.  Next, Google places this information into a server that matches the hash value to known media.  Then, Google turns the information over to NCMEC.  In short, Google searches a user’s email in a manner that would require a law enforcement office to procure a warrant. [5]

Where does this leave things?

As noted in Amicus Curae in Wilson, this potentially means that one will need to operate their own email server in order to maintain a reasonable expectation of privacy on the internet. [6] A ridiculous proposition, but it would not be the first time a Fourth Amendment case said facially or economically ridiculous and impracticable behavior was reasonable. [7]

Recent decisions and jurisprudence however, portend good omens. In Byrd v. United States, the court held that violating a signed contract which had provisions barring certain behavior did not eliminate the reasonable expectation of privacy the Fourth Amendment provides. In short, the court held you cannot sign away your rights or your reasonable expectations of privacy. [8]

Finally, the concern over third party or private searches in the internet age held in dissenting opinions regarding the Fourth Amendment. Most recently, Justice Gorsuch’s dissent in Carpenter v. United States now seem justified. [9] There may be five votes on the court to expand upon the Carpenter holding. [10] Justice Gorsuch noted that the Smith and Miller exceptions to the Katz test could have dramatic and deeply problematic implications for the Fourth Amendment in an era when the majority of American society conducts its business through electronic mediums. [11] In noting that even the reasonableness test leads to unreasonable results, Gorsuch’s dissent notes that the court’s case-by-case approach to the Fourth Amendment threatens the ability of the court to adequately address these new concerns with the Fourth Amendment. [12]

Much like the internet’s disruption of the American economy, it now seems that it provides challenges to the fundamental civil liberties of all Americans as frequently as, well, someone sending an email.

 

[1] Star Trek: Court Martial, (NBC Television Broadcast 1967).

[2] United States v. Wilson, 2017 U.S. Dist. Lexis 98432; see also United States v. Wolfenbarger, 2019 U.S. Dist. LEXIS 148822 (N.D. Cal. 2019); United States v. Ackerman, 296 F. Supp. 3d. 1267 (D. Kan. 2017); and United States v. Stratton, 229 F. Supp. 3d 1230 (D. Kan. 2017).

[3] United States v. Wilson, 2017 U.S. Dist. Lexis 98432 at 17-18.  The first indictment was two counts under 18 U.S.C. §§ 2252(a)(2) and 2252(a)(4)(b). A second indictment a month later charged defendant under 18 U.S.C. § 2251 (d)(1)(A), §2252 (a)(2), and § 2253 (a)-(b).

[4] Id. at 19-20.

[5] See United States v. Comprehensive Drug Testing, Inc., 621 F.3d 1162 (9th Cir. 2010) (Kozinski, J., concurring) (“These and similar search tools should not be used without specific authorization in the warrant, and such permission should only be given if there is probable cause to believe that such files can be found on the electronic medium to be seized.”). A discussion of the limitations placed on the government’s use of hashing technology.

[6] Jennifer Lynch, Your Fourth Amendment Rights Should Not be Limited by Terms of Service, ELECTRONIC FRONTIER FOUNDATION (Sep. 27, 2019), https://www.eff.org/deeplinks/2019/04/your-fourth-amendment-rights-should-not-be-limited-terms-service. See also, Carol D. Leonning, Rosalind S. Helderman & Tom Hamburger, FBI Looking Into The Security of Hillary Clinton’s Private E-mail Setup, THE WASHINGTON POST (Sep. 27, 2019) (discussing as to why this is a bad idea – Secretary of State Hillary Clinton, George W. Bush administration, and the Trump administration), https://www.washingtonpost.com/politics/fbi-looks-into-security-of-clintons-private-e-mail-setup/2015/08/04/2bdd85ec-3aae-11e5-8e98-115a3cf7d7ae_story.html?noredirect=on&utm_term=.e7190be442d0. See also, Matt Apuzzo & Maggie Haberman, At Least 6 White House Advisors Used Private Email Addresses, THE NEW YORK TIMES (Sep. 27, 2019), https://www.nytimes.com/2017/09/25/us/politics/private-email-trump-kushner-bannon.html. See also, Nina Burleigh, The George W. Bush White House ‘Lost’ 22 Million Emails, NEWSWEEK MAGAZINE (Sep. 27, 2019), https://www.newsweek.com/2016/09/23/george-w-bush-white-house-lost-22-million-emails-497373.html.

[7] United States v. Carpenter, 138 S. Ct. 2206, 2266 (2018).

[8] Byrd v. United States, 138 S. Ct. 1518 (2018).

[9] Carpenter, 138 S. Ct. at 2261.

[10] Id. 

[11] See Katz v. United States, 88 S. Ct. 507  (1967) (Harlan, J., concurring); Smith v. Maryland, 99 S. Ct. 2577 (1979); United States v. Miller, 96 S. Ct. 1619 (1976).

[12] United States v. Carpenter, 138 S. Ct. 2206, 2266 (2018) (Gorsuch, J., dissenting) (harbors particularly sharp opinions on the reasonableness of a police helicopter flying 400 feet above one’s backyard).

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Gene Therapy: Therapy For All, But Patents For None?

Written By: Elyse Gottschalk

If you Google the top 10 life-improving inventions of the 2000s, unsurprisingly, the top of the list is “mobile broadband”, the technology that brought live streaming to “cat video” lovers across the globe. [1] While Apple and Samsung were in a race for the best smart phone, science was partaking in its own endeavor – the task of sequencing the human genome, known as the Human Genome Project. After nearly 13 years, three billion DNA base pairs and every gene in the human genome were identified, qualifying it as the second ranked life-improving invention of the 2000s. [2]

But, the Human Genome Project was not the end. It was the beginning of the “genomic revolution”, with the race for development of gene-based therapies at the forefront. [3]

Gene therapy, the replacement of mutated, dysfunctional genes with functional ones as a cure for lifelong (typically fatal) diseases caught the interest of scientists, recognizing the expansive and potentially lucrative opportunity. However, development and testing of these kinds of treatments involves huge amounts of money, and scientists are beginning seek patents to protect their discoveries. [4]

Gene patents are one of the most controversial categories of patents in the United States and abroad. Patent proponents focus on incentivizing invention and promoting commercialization through the economic efficiency provided by a patent monopoly. [5] They argue that, without the protection of patents, because of the unusually high failure rate of biology-based research, the economic burden would limit development to large biopharma companies that could absorb the loss. In addition, in the absence of patent protection, collaborative efficiencies would be stagnated, with companies relying on trade secrets as a means of protection, slowing the development of treatments. [6]

Those opposing patent protection to genetic material argue that it is not consistent with the intent of 35 U.S.C. § 101, which does not historically extend patent protection to phenomena of nature. [7] Their concerns were addressed in Association for Molecular Pathology v. Myriad Genetics, where the Supreme Court held that a gene sequence in its natural form was not patentable, as distinguished from cDNA, a stripped version of DNA sequence isolated in a lab. [8] This means that a specific version of the DNA once isolated or with a specific mutation is patentable, while the sequence itself is broadly available for use.

While the court refused to address the public policy implications, this was a win for those concerned that gene patenting had negative implications for patient care. In fact, as part of the Appellate courts review, the AMA submitted an amicus curiae brief stated that gene patents interfere with diagnosis and treatment, quality assurance, and patient access to health care because it limited the options available for the treatments, leaving patients at the mercy of those holding the monopoly. [9]

Gene therapy, though in its infancy, is becoming a hot topic for scientists and patent lawyers alike. While the Supreme Court’s decision in Association for Molecular Pathology v. Myriad Genetics has provided some guidance into the patentability of genetic material and treatments, like gene therapy itself, the potential developments remain largely untapped. Patent attorneys, the scientists of patent law, will find themselves tasked with navigating the world of opportunities (and associated challenges) presented by the “genomic revolution”, by walking the line between protecting the inventor and benefiting society. The public policy implications that are the underpinnings of patent law are no exception here.

[1] Will McClennan, Great Life-Improving Inventions of the 2000s, The Richest (Nov. 23, 2013), https://www.therichest.com/business/technology/the-top-10-life-improving-inventions-of-the-2000s/.

[2] Id.

[3] Simon Trip and Martin Gruber, Economic Impact of the Human Genome Project (2011).

[4] Id.

[5] Laurie L. Hilla, The Race to Patent the Genome: Free Riders, Hold Ups, and The Future of Medical Breakthroughs, 11 Tex. Intell. Prop. L.J. 221, 237-42 (2003).

[6] Id.

[7] Id.

[8] Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013).

[9] Id.