No Smoking Gun Required – Lost Profits More Broadly Available for Trademark Infringement

Recovering a trademark owner’s lost profits due to infringement has always been difficult. Typically, the court requires some level of malice/intentionality on the side of the trademark infringer in order for the trademark owner to recover lost profits. Showing malice or intent is a challenge because you need to show the infringer's state of mind. How do you do that? Without a “smoking gun” email saying, “I know I infringed, but I don't care, and I’m going to keep on infringing,” it’s almost impossible to prove.  Only once in my legal career did I have that type of blatant admission from the other party. And yeah, we won that case... 

But that could soon change.

On April 21, 2020, the US Supreme Court ruled that the Lanham Act enables a trademark owner to recover profits from a trademark infringer without necessarily proving willfulness. This update to the interpretation of Section 43 (a) of the Lanham Act changes the landscape of trademark infringement law considerably. However, no cases have been tried using this update… so far.

The Lanham Act

The Lanham Act – passed in 1946 – is the primary federal trademark statute of law in the United States. The Act prohibits trademark infringement, trademark dilution, false advertising, and also provides remedies for acts of counterfeiting. It allows for an award of damages for these violations, but varies widely in interpretation across the different Federal Circuits. Generally speaking, the Act does not provide for a specific amount of statutory damages (outside of cases involving outright counterfeiting). Instead, it provides for a range of damages which vary depending on the conduct of the infringer and the totality of facts presented in the case.

The application of lost profits in trademark cases is inherently subjective. Until this recent ruling it relied entirely on intent and the deliberate actions of the infringer, a very abstract inquiry involving ascertaining the state of mind of the infringer. 

To put a set statutory damage amount into trademark infringement law could be considered heavy-handed for an underlying legal issue that's already a gray area. 

How do we account for trademark infringement? In copyright infringement law there are statutory damages, but it's relatively easy to account for how many copies of the copyrighted work were made. 

In the trademark world, you may not be able to count how many times the infringer used the mark. Maybe they put the mark on every single product, but didn’t sell all the products. Maybe the infringer is just advertising online – how many people saw the trademark in that case? Hard to prove. What about social media use of the brand that didn’t necessarily result in a sale? It’s a rabbit hole.

Litigation Strategies 

Clients always want to sue a trademark infringer for money damages. Typically, I tell my clients the most important thing is to stop the trademark infringer from using the mark and stop the brand confusion that is diluting the value of their own product and associated branding. We want to stop letting consumers get confused as to the source of the goods so that my client can start selling all of the products that they should rightfully be selling, rather than the infringer.

That injunctive relief is the most potent part of trademark law.

From an affirmative standpoint, this new interpretation of Section 43 (a) of the Lanham Act certainly shakes-up the equation. As a plaintiff, it's easier to show that you are entitled to their profits, and it lets us up the rhetoric a little bit in how we, as lawyers, can assert the case in a cease and desist letter, or the language we can use in the complaint. 

If we are defending the trademark infringer, we will need to counsel our client so they understand that they can’t just rebrand and expect the case to go away. This new interpretation might encourage plaintiffs to push trademark infringement cases a little further for a settlement.

We have been very focused on stopping the use of a trademark, and not so focused on any type of past damages in the settlement negotiation. Now, that will change because we have a heavier hammer to hold over the defendant. 

Related: Beyoncé, Blue Ivy, and the Kardashians: The (Big) Business of Trademarks

Why Change the Law?

This Supreme Court ruling on 43 (a) was decided in April 2020, so it has not been litigated yet. It will be interesting to see how the district courts use this ruling to determine damages, what is still available for trial, and what the statutory damages numbers are going to be. 

The change is driven by the fact that different circuit courts around the country applied a different standard of the Lanham Act in their rulings. The Supreme Court did not look at these differing interpretations as a massively important trademark issue, they clarified the Act because of the widely varying interpretation of it.

That's one of the jobs of the Supreme Court – to resolve laws that are being interpreted differently around the country to make them more consistent. It was simply administerial work by the Supreme Court to resolve varying opinions. 

Since we have not yet seen judgments based on this new update, we will have to wait and see how it’s applied in trademark infringement cases. 

I am excited to bring you an update once we can see how the law is interpreted and used in a real-world case. It could make a serious change to trademark infringement litigation.

Drop us a message to find out how we can help you reclaim your IP.

Related: USPTO Updates Trademark Filing Requirements - But Will Spam Stop?

Is it Time to Stop Litigating Obsolete Technology? TiVo vs. Comcast

After a four-year battle against Comcast Corp., DVR tech creator TiVo Corp. won an appeals court ruling on one of its patents in March 2020. This win may help in its ongoing fight over two more patent royalties. But is DVR technology, which is rapidly becoming obsolete, really worth fighting for?

Is it Worth the Fight?

When DVR technology first came out, it was groundbreaking. It killed VCRs and any other type of recording and changed the dynamic by which people digested their television. It was a rapid adoption of a brand new technology.

At first, DVRs were standalone (i.e. the original TiVo boxes). Then, they were built into every cable set-top box. But now, as we stream more and more of our content and pay for subscriptions to Netflix, Hulu, Amazon TV, and more, many may wonder why these tech companies are arguing over an almost-obsolete technology that’s quickly going out of fashion. 

Most of us in the “technology-aware realm” are cord-cutters and stream everything. We don’t really do DVRs anymore. However, the vast majority of the country still gets their television through a cable box. Plus, live sports (if that ever happens again) still relies heavily on broadcast television, and requires some form of recording for delayed/on-demand viewing.

Many people still haven't cut the cord. They want to be able to record the news or live sports so they can watch it later. I think it is becoming an obsolete technology, but it's still a powerful force out there and likely drives a continued revenue stream for companies who control that technology. Also, think about that large swath of rural America that doesn’t have access to super-fast internet, and older communities that aren’t as tech-savvy.

TiVo and the DVR technology became ubiquitous. Every cable provider includes a DVR as an option in the cable box they give you. Even though you're not buying it by itself, it still contains technology that someone is buying and passing onto you in their costs.

Related: We’re Not Just Your Outside Law Firm. We’re Your Chief IP Officer 

Reasons to Fight

Many people just like to sit down with their remote control, click through the channels, and be able to record and view later all the episodes of whatever they're watching. I think that might be one of the reasons this case is still being fought. There's still a big market out there for DVRs – or at least the technology and functionality that is embedded in them. 

TiVo is the plaintiff here, trying to reap the benefits of what is their original technology. Even now that it's kind of ubiquitous, and seemingly lots of companies are using the technology, it's still worth money. They might not be trying to get DVR customers on their own anymore, but the revenue train for DVR technology is undoubtedly still out there. I don't think it's a nominal amount at stake.

The threshold for when to stop litigating a patent is most commonly when it is no longer financially beneficial for you to do so. Also, the patent laws provide for a 6 year statute of limitations. This allows you to go back six years for damages, even after the patent has expired. Those prior six years might contain billions of dollars worth of sales and you can still collect revenue in a lawsuit based on those prior sales. 

In the TiVo vs. Comcast case, we're talking about technology that's become so ubiquitous that there are still very, very large volumes of sales, both in terms of numbers and dollars. There are certainly lots of cases that we deal with where companies are like, “why should we even bother patenting this? We know the technology is going to change in three years.” But here, with the benefit of hindsight and a 20-year patent, it is still likely a winning scenario for TiVo to keep pushing the case.

Patent Aggregation and the Tech Sector

Things have shifted for the smaller companies that might not normally invest heavily in protecting their technology through the patent system. Because of patent aggregation firms, there is now value in applying for patents on technology that might be obsolete in a few years or that you might not commercially pursue on your own.

These firms buy patents from small businesses, keep them, and litigate them where they can take a cut of the recovery. No matter how small the technology, or how likely it is to be obsolete in a few years, these patents can now be monetized providing a potential revenue source for companies outside their true core competencies. 

Many companies don’t realize that there is not a requirement to produce and sell your invention (a so-called ‘working requirement’) in the US patent laws. I can come up with an inventive idea, patent it, but never build it or commercialize it. If someone else does five years later and sells a billion of them, I now have the right to sue them. That's what patent aggregation companies such as Fortress Investment Group are doing. They're aggregating all the patents and then trying to monetize them through the litigation system.

Related: Fortress Investment Group: Bad Actor, Bad Timing, or Both? 

Where are TiVo and Comcast Now?

Now, Comcast is not allowed to import its set-top boxes into the US. The import ban was issued by the US International Trade Commission and was affirmed in March by the US Court of Appeals for the Federal Circuit. 

In June, the Supreme Court denied a petition by Comcast to review the import ban on the case.

TiVo is currently seeking further orders to limit imports of Comcast set-top boxes based on other TiVo patents. 

“We understand the value of our patented technology and why Comcast has relied on it heavily since launching its X1 platform,” Arvin Patel, TiVo's chief intellectual property officer, noted in a public statement. “We are hopeful today's announcement will encourage Comcast to put their customers first and license our IP just as the other top nine US pay-TV providers do.”

The patents being disputed in the ongoing cases are centered around remote access to program guide functions in set-top boxes made by Commscope Holding Co.'s Arris International and Technicolor SA for Comcast.

We are currently waiting on two more court decisions to come out. We will keep you updated on our blog.

Stealing or Buying a Stairway to Heaven? All That Glitters Is Not Gold

Stealing or Buying a Stairway to Heaven? All That Glitters Is Not Gold

Like most boys of my vintage, I grew up as a classic rock fan. Led Zeppelin has been in my blood since I was thirteen. The words and music of Stairway to Heaven is burned into my brain. When it comes on the radio, I can sing every single word, and I can hum every single bar of the melody and solos. It was one of the first, if not the first, song I learned to "play" on a guitar. That opening lead line is about as classic as it gets, and why I wanted to learn how to play the guitar. Not even the whole song, just that intro! If you listen very hard, the tune will come to you at last. I bet you are humming it right now.

I can remember dancing to the song at my middle school dance in the '80s. It starts out as a slow dance, and then it rocks out. What do you do? You're slow dancing with someone, the song has a bridge, and then shifts to hard, heavy rock. You're standing there awkwardly with your date, and you're like, 'Okay, how do we do this now?' 

That's the classic Stairway to Heaven scene in my head. Today, my kids know that song. This is legendary music that spans generations. It's a monumental song in the history of music, and its reach spans generations.

That's why this case spoke to me!

The Case

Spirit brought a copyright infringement case against Led Zeppelin that claimed the opening lead lines of Stairway to Heaven were lifted from its song Taurus. It is just a short snippet that is allegedly infringing Spirit's copyright. Because it is in the intro, you only hear that intro riff once, right up there at the front of the song, and it is not repeated.  Listening to the two melodies side by side, I admit they sound similar.

If we were to compare this case to a similar copyright infringement case between Katy Perry and Flame, I would say, trying to be as objective as I can, that Stairway to Heaven was much closer to the Spirit song than Katy Perry was to Flame.  See the link below for my article on Katy.

Related: Katy Perry Escapes Dark Horse Copyright Verdict 

As discussed in more detail below, the jury was never allowed to hear the actual recordings of these two songs.  If they were allowed to listen to the Stairway to Heaven intro and the Taurus intro side by side, it certainly would have changed the case.  They would have had a much easier time telling that the two lead lines were very similar.  When you dig into the music, there is merely a subtle difference in the melody; the last note is the only real difference. The tone of the guitar is very similar; the pieces are very similar.  

Here is a comparison on YouTube for you to listen to

What was also surprising to me after hearing the two lead lines was that Led Zeppelin and Spirit not only knew each other but also were tour buddies during the time period the alleged copying occurred! Just anecdotally, you think, 'Well, that's copying.' Access is a vital component of copyright infringement. If you create something by yourself that's identical to someone else's, but you never had access to the original to copy it, you're unlikely to be found guilty of infringing copyright. Independent creation is a defense to copyright infringement.  

Why Was The Jury Not Allowed To Hear The Songs or Evidence About the Bands’ Relationship? 

Led Zeppelin was found not to be infringing on Spirits' copyright, and there was much hand waving and yelling about Led Zeppelin winning on a technicality. Well, that is not entirely true; the law is the law. Led Zeppelin's legal team did not use a technicality - they just used the proper law. 

Stairway to Heaven and Taurus were both made before 1973 when the copyright law changed to include recorded material. During the case, the judge had to apply the prior version of the copyright law from 1903! 

Wait, what . . .!

In 1903 there was no such thing as a sound recording, so the 1903 copyright law only covered written materials. So the jury could view the sheet music, but not listen to the actual song recordings. What average person can actually read sheet music effectively, let alone make a comparison as to similarity under a 1903 law? Spirit did not have the right to play the songs in court, and unfortunately, Spirit's lawyer knew that going in. If the alleged violation had been ten years later, it would have been a completely different set of rules to follow, and the judgment may have been different. 

Likewise, and what probably helped Led Zeppelin the most in this case, the court decided to abandon a long-held legal principle regarding the role 'access' could play in a copyright determination. This resulted in the jury not being able to hear the evidence about the relationship between the two bands and what might have led to further evidence of access to the specific song. So, left only with the sheet music, they understandably concluded no infringement.

When I see the correct laws applied and upheld, such as this case, it gives me some comfort, knowing that the rule of law is still in place. Us lawyers, that's how we function. If the courts don't follow the rules, our whole business model breaks down. I have to know that other people are going to follow the same standards and regulations that I'm following: they will follow the law to the letter. That's the only way it works.

Related: Taylor Swift, Big Machine and Audible: The Battle over Copyright Control

My Judgment

The jury's decision was probably correct based on the evidence they were allowed to hear at the time. The jury was not allowed to listen to the evidence that the bands toured together, in addition to not being allowed to listen to the recordings. That is critical. Based on the evidence they heard, and following the law, they were supposed to follow - they made the right decision.

As a matter of public policy, it doesn't feel like the right decision, but reasonable minds can differ. Cause you know, sometimes words have two meanings. As a matter of being a Stairway to Heaven and Led Zeppelin fan… I think it was totally the right decision. 

If I were a member of the jury and had been able to listen to the riffs during the trial, and I knew about the bands touring together, to be honest, I probably would have ruled against Led Zeppelin myself, because even for a fan like me, there are two paths you can go by and sometimes all of our thoughts are misgiving

The Take-Away For Creatives 

  1. Understand the current state of the law and how it applies to your creation. Do your research before taking the matter before a court.
  2. Remember that that law might be interpreted differently depending on where you reside and where you create your work of art. There are 12 circuits in the USA; all have slightly different interpretations for issues that get complicated like this. Different facts will have different levels of impact depending on where you reside and where you bring the case. 
  3. Find out the best state to sue for copyright infringement. There might be jurisdictions where the facts and the application of the law are a little more beneficial to your situation, and you might be able to sue in a different venue that would be more beneficial to you.
  4. Know whether you have jurisdiction in the state you want to sue them in. Does the court have authority against that person?

Dark Horse Copyright Case

Katy Perry Escapes Dark Horse Copyright Verdict

I am unashamed to admit that Katy Perry is, without a doubt, my favorite pop singer. I don’t really know why.  I listened to classic rock and heavy metal as a kid.  My affection for Katy and her music horrifies my kids.  And my wife.  And many of my friends . . .  But I embrace it and roar out loud when her music plays. So, this Dark Horse/Joyful Noise copyright infringement battle was on my radar from the very beginning. 

What Happened?

Christian rapper Flame sued Katy Perry for allegedly sampling a short series of notes from his song, Joyful Noise, in her song Dark Horse. Flame's legal team argued that Dark Horse contained an ostinato (set of eight beats) that included half a dozen similar elements to Joyful Noise.  It was just these 8 notes that were at issue and nothing more from the respective songs.  In the first court case, the jury agreed with Flame and he was to receive $2.78 million in compensation from Katy Perry, her collaborators, and Capitol Records. Neither side disputed that the songs as a whole were different, or that the overall melody was different. 

For some background, here is a side-by-side comparison of the ostinato in question:

When the trial court verdict was handed down, there was some shock and surprise in the music world. Under the standard interpretation of copyright law, no one can copyright a simple short series of notes. Otherwise, music creation would become a minefield, stifling the music industry's creativity. Can you imagine the complications of trying to write a song and then trawling through the last 70+ years of music to make sure that you did not accidentally sample a couple of notes from a song? Then if you find you did have similar notes, having to pay royalties to a reasonably large portion of artists to use a few beats in your song? It seems prohibitive. The complication arising from this judgment could be wide-reaching and not only almost halt music production, and send music prices soaring, but exponentially increase time to market. 

Katy Perry fought the initial verdict and won. Fortunately, appeals like this are ruled on by a panel of judges, not a jury; this meant that the judgment was based purely on copyright law and whether the facts actually supported such a conclusion, rather than relying on the individual opinions of lay people. The judge overturned the initial verdict on the basis that you cannot, in fact, copyright a few musical notes. This was precisely what the music industry had been arguing since the first verdict was handed down. 

Apparently at the trial, Katy Perry's lawyer even played upwards of a half a dozen songs that all resembled the ostinato at issue during the trial where only one of them was from the Katy Perry song in order to show the prevalence of this particular series of notes over time. Some were even from famous pieces of classical music but it was to no avail. 

Fortunately, the judge who overturned the initial verdict concluded that the ostinato was not original and that it was not enough music to qualify as a new work of art to be protected by the copyright laws.

Related: Taylor Swift, Big Machine and Audible: The Battle Over Copyright Control

What Does Copyright Law Say?

Copyright law is seemingly simple - you cannot copy someone's work of authorship, which can be written words, photographs, sound recordings or performances, among a few other things. A piece of music falls under a couple of these categories. It falls under a work of authorship as a written piece of music (i.e. the notes on the page that someone comes up with), you have the audio recording of the song itself, and you've also got the stage performance. 

I can't take a Katy Perry song and sing it myself on stage for profit or in a commercial setting. I'm not hiding the fact that I didn't write it. I'm saying, 'Hey, I'm covering Katy Perry.’ Absent permission from her, that is copyright infringement.  You may be thinking, but what about cover bands? A cover band typically has to get permission from a licensing group to play other people's music. Even groups such as church worship bands get blanket licenses in order to perform other people’s works.  Otherwise, it's copyright infringement. And the right of performance is one of the exclusive rights granted by copyright law. 

However, it starts to get murky when we introduce ‘fair use.’ The question that arises is, how much can I take from the original author so that it will qualify as non-infringing or as fair use? Fair use states that if you take a nominal part of someone's work of authorship and use that, it's a defense to copyright infringement. 

Copyrights also have a limited lifetime. They expire and go into the public domain at a certain point after the creation of the original work. For example, the work of Mozart, and all classical composers, is now public domain. I can perform Mozart without getting prior permission. In general terms, Copyright law states that a copyright is valid for the artist's lifetime, plus 70 years. 

For my contemporaries, you may remember a similar issue in 1990, where Queen sued Vanilla Ice for using their unmistakable intro to Under Pressure in his equally famous Ice Ice Baby. In that case, Vanilla Ice eventually bought the rights to the intro melody from Queen, saying it was cheaper to purchase the rights then fight Queen in court. Here is the sample on both

Related: TikTok, Tick-Tock. Can You Claim Copyright on a Dance Move?

My Judgement

In my mind, this is undoubtedly the correct result. Yes, those melodic lines are similar but the full songs are entirely different and can in no way be confused. The appeals judge made the right decision and I think that the jury simply got confused by the arguments made by a good plaintiff's attorney. 

Market Intelligence and Brand Management

Market Intelligence and Brand Management

By Craig Neugeboren & Scott Papich

Scott and I met on a random ski day up in Eldora through a mutual friend, who is always looking to introduce people with common interests and personalities. He knew about Scott's business as well as mine, and he's like, "Hey, you guys should talk because you're both focused on the outdoor industries." I actually think he was sitting in between us on a chair lift when that conversation happened.  Boy, I long for those shoulder to shoulder days again . . . 

Hey, Scott, what do you do? Hey, Craig, what do you do? I'm like, "Oh, trademarks and branding." He's like, "Oh, I deal with brands too. How do you deal with it?" So, we got chatting.

We ended up meeting again at the Outdoor Retailer Snow Show and talked about how we might collaborate. Scott does analytics and market intelligence to help a company identify where they should be focusing their marketing efforts, who their customer base is, and other forward-looking aspects relating to business trajectories. Whereas we are assisting clients in protecting the more concrete parts of a brand, it's typically during that company's life cycle when the two of us are usually interfacing with the client.  

We at Neugeboren O’Dowd are always telling our clients that the branding piece of their business is something that they should be thinking about early in their development. Scott's company, Outside Intelligence, gives intelligence to the company's roadmap so that they're not just swatting at flies trying to figure out who their customer base is and where their branding efforts should be focused. 

While Scott is helping build the brand recognition, we at NOD are protecting brand recognition. We do different things, but it's generally on the same timeline. We are both working with clients at an early stage of brand development to make sure companies are on track when they grow their market share. This positioning makes it easier to refer clients to each other and recommend each other's businesses. 

When a client asks for someone that can help interpret their analytics and enhance their marketing - we can send them over to Scott when Scott's clients need to register IP. He refers them to us. There is a little overlap in what we do. How a company uses its trademark is vital to how NOD files the trademark application. For Scott's team, understanding the target market, the customer base, and the product is essential. With this collaboration, we can be a better service provider to our clients by pointing them in the right direction.

Helpful Data

When helping my clients, the most critical data is when you identify a target market with the level of specificity that Scott can provide. This data helps me in the procurement of the trademark and the enforcement of the trademark. To be able to watch out for competitors, really understand who competitors are, and what those companies are doing is essential. 

If we're going to do a clearance search for the company, having competitive information about your client helps to narrow the critical risks out there. This data will help me identify direct competitors and look at those competitors in detail before assisting a client in choosing their brand. With this intelligence, I can make sure we stay away from these competitors. When you can consider those competitors ahead of time, it prevents you from stepping on a direct competitor's toes.

Related: Is it Worth the Hassle to Protect Your Cannabis Brand?

Let me hand it over to Scott to explain a little more about what he does and how market intelligence can improve your brand.

Scott Papich - Outside Intelligence:

Brands want actionable data that they can use to strategize against the competition and to improve their sales and profitability. Not all companies invest in access to market data, and those that do, many do not harvest enough value out of their data.

Companies want to know: What is the actual size of our market? What's the real potential revenue we should be planning for? What are the actual retail selling prices of the products, and the overall categories we're selling? How does that compare with competing products from other brands? Who are the top three brands in our market, and how exactly does the market-share break down? And how much is each point of market-share worth, in both retail and wholesale dollars? You can determine the real answers when you have solid market data with a little experienced interpretation and logical analysis. 

Brands and businesses want to take care of the customers they already know about, target the customers they are reaching out to, and find the customers that fit their brand. This customer acquisition goal holds for business to consumer (B2C), direct to consumer (D2C), and business to business (B2B) companies. 

Brands often make assumptions about who the top two or three brands are that they compete with, or what the top-selling products are within their competitive space. Many brands think that because their products sell in a particular pattern over the course of months and seasons, the entire market sells that way. But such is not always the case. Decision-makers have plenty of anecdotal info, so they think they know how consumers behave, but it's eye-opening to see the real data. Once you see how your sales fit within the total market, and how you compare versus your competitors, you uncover opportunities.

Breaking Down Your Data

After seeing real patterns and anomalies in the market data, new questions arise. What's making this happen, and what's driving that trend? Why do customers spend their money on this and not on that? Why does this pattern concentrate in one month when the year before it happened in another month? Why did consumers switch brands during a particular month or season? The answers to these questions help brands make marketing decisions, product decisions, selling decisions, distribution decisions -- decisions essential to gaining market share. 

Example: a well-known sports apparel brand had no idea that it had lost its number one market share position until it examined 3rd party market data. The data was laid out in a graph showing how brand sales compared over time. The client brand assumed that, because their sales were flat, probably all consumers were simply buying fewer gloves. However, the market data raised questions around specific styles or items within the category and price points. 

What ensued was a thorough review of that brand's glove category. They brought in and tore apart a dozen different products from competitors to better understand what they could improve. They studied the data for price points and consumer purchasing seasonality. They looked at competitors' marketing, and then their marketing. In short, the market data told the company where to dig deeper for useful intelligence, and the resulting insights revealed why some consumers preferred competing brands. The client brand was able to attack all fronts utilizing fresh strategies that ultimately came out of the market data. Over the course of approximately 14 months, they were able to regain their number one market share position, increasing retail sales by $2 million.

Without the initial market data analysis, the company would not have known even to ask the right questions, let alone that they had unknowingly lost market share in the first place. 

Clients that NOD is working with on intellectual property are often at a stage in their development as a company, where they haven't yet dug into market data. However, there's a significant opportunity there if they decide to take the plunge. The number one question for the brands and companies at that stage is, how big is the market they're trying to serve? Many of Craig's clients are outdoor brands that work in apparel and soft goods. They don't know how many target consumers are out there. By walking through a sporting goods store or a mountaineering store or a cycling store, they get a sense for what the average prices might be, but they don't know what the actual data is -- how big the market is, what products consumers are buying, and which brands they gravitate to.

Brands need to know the seasonality of their product categories because there's a whole schedule of design, development, production, shipping, and selling at the wholesale level that needs to happen to meet consumers where and when they are ready to buy. More established brands need this information, and most invest in it. If you look at sports apparel brands in the US, the top three are worth $10 to $20 billion a year in retail sales. 

Five Top Reasons Why You Should Get Data Smart

  • You learn where you should be focusing more of your attention and resources to gain market share, which almost always leads to higher revenue and stronger profitability. 
  • You learn where to make the tough strategic decisions -- you can make deliberate decisions to either improve on certain products and categories or to intentionally not focus there. Some companies want to grow in every category that they operate in, but that doesn't necessarily make a company more profitable. Often, the strongest, most unique, and valuable brands decide what to do well and then become the best.
  • Market analysis helps you focus on the consumers’ perception of your marketing. You can better understand who your real customers are, and what they respond to, what price points have the most volume, and where the transactions are happening. Consumers vote with their dollars, and every brand does better when they understand consumer behavior. 
  • Data helps you make smarter decisions on where you're going to distribute, and what retail partners you decide work with.
  • Data helps brands figure out what they're missing out on. A great example is an apparel brand that saw its sales increase by 50-75% every year during the holiday season, and they thought they were capturing all the opportunity that was out there. But they didn't understand that their competitors were routinely increasing sales by 200-400% every holiday season. The example brand didn't know that they were losing significant market share during the months of November and December, every single year. Some deeper analysis helped them make some obvious decisions about packaging and messaging to consumers about their product.

About Outside Intelligence

We help brands interpret data, whether that is internal financial data or market data available through several various data providers. We help clients go through that data and interpret it so that they can ask the right questions, gain insights, and focus on strategies. Outside Intelligence helps brands, marketing managers, product people, salespeople, and executives look at data so that they can ask relevant and timely questions and ultimately figure out how to influence what happens in the data going forward. 


Related: The Right Team

We’re Not Just Your Outside Law Firm. We’re Your Chief IP Officer

We’re Not Just Your Outside Law Firm. We’re Your Chief IP Officer

Why is it essential to have an IP firm working alongside your company from the start and also as it grows? Companies do not realize how ubiquitous IP issues can be and how simple maintenance and upkeep can help streamline bigger processes.  Seemingly non-IP milestones during a company lifecycle, such as acquisitions, licensing, and international expansion, almost always involve aspects relating to some form of Intellectual Property. Proactive planning in your IP processes can eliminate headaches and extra work down the road. Without it, corporations often find themselves rushing to put out fires that could damage their reputation, their firm's value, and even some form of liquidation event. 

Many companies do not understand just how far-reaching IP is. For example, it often starts with an employee/human resources issue concerning ownership and assignment obligations or trade secret responsibilities. Further along, it becomes a technology-heavy issue relating to your research and development organization and associated product development efforts. Later, it implicates third party interactions such as joint development agreements and licensing.  And all along the way, the branding and marketing of your products implicate their own IP issues.  

During mergers, acquisitions, and other technology transfer events, IP and particularly, patent ownership problems regularly present themselves. I regularly work with large corporate clients that acquire smaller companies, and each time, the transfer of ownership of both US-based and global trademarks and patent applications has been a primary administrative concern during the transaction. In the US, it is not a hugely challenging process because we control and are intimately familiar with the laws and paperwork involved, but the same rules do not apply to global transfers and the laws of each individual country in the mix.

In many foreign jurisdictions, the paperwork, legalization, and document formalization requirements can be exceptionally onerous. The Japanese patent office, in particular, will not accept a generalized merger document as an assignment. Many countries require “legalized” documents for recording, which often require signatures and “gold seals” from the US State Department or a foreign embassy.  If you do not have the right materials and processes put in place during that foreign IP transfer transaction, or the wrong owner is still listed in a national patent and trademark office because it wasn’t corrected along the way, it can be particularly challenging to correct after the fact.  Or at least time consuming, which is usually not a luxury during an acquisition.

We regularly see, particularly within merger or acquisition paperwork, a small paragraph buried in the broader document that says, 'All patents or trademarks are hereby transferred from one company to the other,' and this often does not fly for international ownership transfers. When we record new assignments and change the ownership for those pieces of property, the better practice is to provide a separate document that shows the transfer happened or at least have each specific piece of property itemized on the schedule. When that document is just a paragraph and not separate and distinct from the overall acquisition transaction, we have to create a whole new document or have a foreign associate do the same to comply with local rules.

With new documents come new signature requirements, and many times the corporate leadership has already changed, so getting them re-executed becomes a problem or impossible. If we had been alongside to offer advice from the start, we would have assisted the acquiring company in writing the correct documentation from the get-go. 

Related: Is Your Startup Making These Mistakes With Your IP?

We routinely receive panicked last-minute calls where a company is about to receive investment money or is undergoing a diligence activity. And oftentimes, we aren’t even made aware that an acquisition is taking place until the deal is done, or more commonly, when someone realizes that the “merger document” did not include the proper provisions to make the actual recordation of the new owner simple or even effective.  At that point, we are asked to scramble to file the documentation and make it right.

Short Shelf-Life

Aside from the paperwork hassles identified above, IP rights have short shelf lives, and if you do not take action within a particular time frame, you can lose your rights. For patents, in particular, there are critical dates that must be adhered to after certain events happen in a company's life. After your idea has been in the public domain for more than a year, it can generally be used by anybody without any recourse. All of your hard work, all of your company value that may be based on one patent application, will be lost forever.

Luckily, the trademark world is a little more forgiving and allows you to file even after you have been using the trademark for a while. However, in trademark law, your rights are determined by who first used the mark. So even though you might have used it early, if you haven't filed it, it creates a messy situation to try and recover rights if someone else applies for the same thing.  What should have been solely an administrative event is now a quasi-litigation and usually adversarial in nature, adding exponentially to the cost.

Having an IP specialist on board in an advisory role to educate your company on filing dates, get those dates on a calendar, and make sure everyone is aware of how these processes work, has proven to be extremely valuable to our clients over the years, even if just to course correct to avoid these seemingly small administrative issues. 

For that reason, we often offer to sit in on client board meetings and other early strategic sessions for no cost so that we can help you steer clear of these issues.

Related: Protecting Your Intellectual Property Operating, Employment, and Founders' Agreements

My Top Three IP Paperwork Tips to Know

  • Do not put your IP, patent, or trademark applications on the back burner. Doing the paperwork early does not have to be expensive. 
  • If you're undergoing an acquisition, either being acquired or you plan to purchase another company or its IP assets, that is an excellent point to get us involved so we can help you create cleaner paperwork. It's that simple. 
  • If you are in the early stages of developing technology or brands, let us help create processes for you so that you can capture the right information and not get into a scenario where you're potentially losing rights.


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Living a White Collar Quarantine? - Pay it Forward!

Last week the New York Times published a piece titled “White Collar Quarantine” that struck me as something many in Boulder are experiencing, myself included. I’ve had conversations over the last few weeks about this dynamic. Conversations about how in a town where the true extent of our affluence is often forgotten, and in a company where our day to work process barely flinched, the stay at home orders seem more like an extended staycation.  My neighbor told me that it felt like God gave us a time out. I’ll be the first to admit it has been nice at times. Mixed feelings for sure. Part fear, part blessing, and part guilt. Two weeks ago, I couldn’t find toilet paper, but I was able to buy free-range pork chops and Kobe beef for a backyard bar-b-que.  I’m the poster child for the White Collar Quarantine. Not so much for the restaurant and other small business workers who aren’t able to so easily continue to work or for which their businesses were ordered to shut down. Many volunteer opportunities have shut down too in light of the ordered limitations on gatherings.  How do we pay it forward for these folks?

Love Local - Help Save Your Favorites

This pandemic is unprecedented and scary for sure.  Unprecedented not just in its effects but in the speed at which it shifted our lives, the economy, and our perceptions about the future.  Three weeks ago, our firm was discussing how strong our first quarter financials were looking and anticipating the same trajectory for the foreseeable future.  As a law firm, our numbers will somewhat lag the near-instantaneous nature of this slowdown, and we won’t be able to see the financial impact for some months (scary in itself).  In the meantime, it is hard to sit in our comfy homes with nearly every amenity available at the click of a mouse while so much of our community is on the front lines or still trying to scrape by to serve the rest of us.  So while our balance sheet is still in decent shape, our firm announced our own “mini-stimulus” for our staff. No strings attached, but it was done with the stated preference to use it to help support those restaurants and businesses in our communities that they would hate to see go out of business.   At the end of this article is a list of the establishments that came to mind across our team, but there are many, many more, and there are many local efforts to do the same. Many of these businesses are close to our main office in Boulder, but many others are in each of our neighboring communities.

Some Silver Linings and a Note to Our Clients

In this dark cloud of the COVID-19 crisis, there has been another more personal silver lining for our practice; remote working has given us a glimpse of each other’s everyday lives.  While all are equipped to work remotely, many of our team members do not have dedicated office space in their homes. I have met my team’s families, kids, pets, seen into their home lives, and perhaps even learned a little more about what motivates them and excites them - just by using video calls.  Perhaps the now forbidden nature of in-person contact has enticed us all to want that more, and I find myself reaching out on video more than I might have done in a typical day to day setting.  

I have found it refreshing to be able to work remotely more, step away from my desk when I need to, plan my hours, and plot tasks in a way that fosters creativity in a different way. At Neugeboren O’Dowd, we have never had prescribed hours, have always been 100% remote-capable, and implemented unlimited time off several years ago.  As long as tasks are handled, we can work in ways that suit us from day to day. However, right now, because being remote is mandated, I sense a growing ease that working from home is a viable scenario for more people.

We, as a team, have accomplished the same amount of work over the last few weeks from home as we would have sitting in an office building.  I am seriously starting to wonder if - when the pandemic is over - companies will re-evaluate the need for office space, or at least re-evaluate the extent needed.

Related article: My Brush With Big-Law Burnout 

Embracing Technology

Our entire staff has always been enabled to work remotely; it is, and always has been, part of our firm’s ethos. We have always embraced technology and made sure that our team members have everything they need to complete their tasks successfully from the comfort of their homes or on the road.

As Intellectual Property specialists, we deal with technology, branding, and marketing companies as clients, so everyone we work with is very used to electronic communications and are savvy with technology. We have clients and associates in other states and other countries, so we have always depended on the electronic world to communicate with them. When we engage new clients, we tell them that we are 100% electronic, as much as we can be. We joke that if you get something in the physical mail from us, it's either because it's an original document that you need to keep safe, or something's gone wrong!

The technology that we use for our remote work has morphed over the years and upgraded and changed over time. Still, we have always had the ability to work remotely via a laptop or desktop computer. We have encryption and network security in place to allow each of our team members to securely and quickly log in to our servers and to access our system.  

We are not a huge firm, so we do not utilize applications such as Slack or Microsoft Teams; these apps are too big a hammer for the number of people we have and would only create more work and inefficiencies for our staff. We are, however, very communicative. Because our office is relatively small, we typically did not use Zoom, Google Hangouts or UberConference to talk to each other too much, until now. Just this past week, we had our first office Zoom meeting with everybody on the screen - everybody logged on, no one had problems, and it worked well.  If the Coronavirus has proven anything, it is the need to learn technology and embrace remote working for almost every business. 

During this pandemic, nothing has changed for our clients or us in terms of the work we do. We are fully functional and our docketing and other systems are 100% online and accessible.  Aside from some “can I get a bigger monitor” requests, switching to remote work was a matter of flipping a switch and locking the office doors on our way out. Kudos to Bernadette Barrett, Rene Roskam, and RMTT for keeping things up to date and processes in place to make it so seamless.

Related article: What Lawyers and Clients Need to Know About the Use of Artificial Intelligence 

Not every firm was able to make this transition so easily, so here are a few suggestions to make this scenario  more routine:

Tips To A Successful Remote Work Life

  • It is helpful to create physical boundaries for your workspace. I think it's important to have a way to physically distinguish work from play and home, and make sure the rest of the folks in your household respect that. Treat it like work, at least for certain designated hours of the day.
  • Physically, you have to take care of yourself, exercise, and eat well. If you can’t go to the gym, bring the gym to you - get some weights or take a walk outside. 
  • Continue to have interpersonal relationships. If you are a leader in a company, reach out to your team to say hi and check in on how they are doing and see how you can help. 
  • Take care of yourself; shower, shave, comb your hair, put on a nice shirt. Just make yourself feel like you're working.
  • Reach out to clients and check-in, show them you are thinking about them, and let them know you are still fully functional, and can help them in some way. Now is the time to be more personal with your clients and maybe forego the business talk.
  • Embrace technology. If you're someone who is maybe a little bit afraid of that or timid of it, this is the perfect time to lean in and make sure you understand how to use it. It's an opportunity for folks who may not be as comfortable with technology to thrive and learn to be an expert.

Love Local

During this time, it is even more critical to support your local businesses, and our team here at NOD would like to give a shout out to our local favorites and go-to places that we want to see for years to come.  All of these are doing takeout or delivery orders still or will sell a gift card for use later. Especially if you find yourself in a white collar quarantine, visit your own local spot and help pay it forward a bit!

North Side Tavern - Broomfield

Early Bird Restaurant - Westminster

The Hungry Toad - Boulder

Truman’s Barber Shop - Boulder

Nepal Cuisine - Boulder

Gondolier Italian Eatery - Boulder

Caffe Sole - Boulder

Rebecca’s Apothecary - Boulder

Sushi Zanmai - Boulder

New Moon Bakery & Cafe - Nederland

Ruthie’s Boardwalk Social - Boulder

Cacciatore at Heller’s Kitchen - Fort Collins

Falafel King - Boulder

One Boulder Fitness - Boulder

Ted’s Montana Grill - Westminster

Big Mac and Little Lus - Westminster

Zoe’s Kitchen - Boulder

Cyclhops and Oskar Blues - Longmont/Lyons

Cannon Mine Coffee - Lafayette

Upslope Brewing Company - Boulder

Front Range Brewing Company - Lafayette

Southern Sun/Under The Sun - Boulder

Ozo Coffee - Boulder

Picas - Boulder

The Dugout Grill - Erie

Panang Thai Cuisine - Lafayette

Beleza Coffee - Boulder

Little Brazil - Lakewood

CrossFit Profectus - Broomfield

Mod Market - Boulder

Busaba Thai - Louisville

Boss Lady Pizza - Boulder

My Ramen & Izakaya - Boulder

Village Coffee Shop - Boulder


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Taylor Swift, Big Machine and Audible: The Battle over Copyright Control

Taylor Swift, Big Machine and Audible: The Battle over Copyright Control

It's an intriguing tale that has garnered a tremendous amount of public attention. A beloved young singer named Taylor Swift is in an epic battle to wrest control of her music back from the intriguingly named Big Machine, now owned by the famed manager, Scooter Braun. 

Emotions have run high as Swift and her fans mourn the loss of her music and berate Braun and company for their heartlessness. With Swift's encouragement, some fans began doxxing Braun and others, while Braun says he has received threats from Taylor Swift fans. Big Machine has even put out a statement suggesting that Swift has gone too far with her public battle. 

Drama aside, though, this is a straight-up copyright issue. 

Braun quietly bought Big Machine and the rights to Swift's first six albums last year. Swift was furious and has waged a very public battle with Braun over those rights. 

Who Owns the Copyright?

Swift did initially own the copyright to her works. Ownership of a copyright, of course, always goes to the author of the copyrighted work, in this case the music itself and the performance rights surrounding those works. 

That is until the author chooses to sell or assign those rights. This is precisely what Swift did, just like many up and coming artists in search of the career support that a big label can provide. 

Even when she was in a good position with Big Machine, Swift would not have been able to perform her works at a concert, or even at a birthday party without the permission of the true copyright owner, Big Machine. They owned the copyright, and she would be performing those copyrighted works. She's admittedly beholden to the owner of the copyright for the duration of that agreement.

The fact that Swift is no longer happy with the deal she signed does not make that contract go away. 

Related: Eminem, Meet the Supreme Court of the United States

The Right to Hold (and to Sell) 

Copyrights aren’t just about the right to copy a work of art or a song. There are quite a few “exclusive” rights assigned to the general umbrella of copyright law. These include: 

  • The right to reproduce or the right to make copies of a protected work.
  • Distribution rights or the right to sell or otherwise distribute copies to the public. These could be books or recordings, for example.  
  • The right to create derivative works or adaptations, which includes the right to prepare new works based on the protected work.
  • The right to perform and display the work. These include the right to perform protected work, such as a play or a song, or to display a work of art. 

The copyright holder can choose to sell all or part of any of these rights to someone else, which is essentially what Swift did. Copyright law also allows the copyright holder to license these rights to someone else for a fee. 

Every time anyone performs or uses a Swift song from one of the six albums he owns, Braun and Big Machine presumably earn a licensing fee. 

Related: Yes, You Need a Registered Copyright

Rights and Revenue

There are two critical copyrights in the music industry. The first is songwriting copyright, which belongs to whoever wrote the music and lyrics. This right generally covers the revenue received from:

  • Performance royalties for live performances of the song 
  • Mechanical license royalties which are fees paid for every copy made of the song 
  • Synchronization fees for synching the song to a movie for example 

The second piece is the sound recording copyright, which includes: 

  • Digital and physical record sales revenue 
  • Master-use license fees if, for example, the song is used in a movie. 

We don't know the exact details of Swift's contract, but it is likely that in return for signing away her copyright, she received promotion and recording benefits from Big Machine. When Scooter Braun arrived and bought out Big Machine, and along with it, the rights to Swift's music, the singer decided she didn't like the contract anymore. Hindsight is 20/20, but unfortunately for Swift, that is not how copyright law works. According to news reports Swift hasn’t ever challenged the legitimacy of the contract she signed.  She just wanted to renegotiate the terms after the fact.

Swift’s Options

Swift does have some recourse. According to the singer, her original contract with Big Machine allows her to begin re-recording songs from her first five albums starting in November of next year. Essentially this means she can re-record her songs, presumably with some unique twist to them, and then release those new recordings to compete with the original recordings now owned by Braun. Of course, this could create a whole new set of problems, including some confusion among her fanbase. 

Understand What You're Selling

The lesson here? Know what your rights are, and know exactly what you are signing away. Just because it doesn't seem right that a popular recording artist like Taylor Swift does not own the right to her songs, it doesn't negate a valid contract. 

Understand What You're Buying

In another example, the seven major book publishers who recently launched a copyright infringement case against Amazon's Audible service knew exactly what rights they signed away.  

HarperCollins Publishers, Penguin Random House, Hachette Book Group, Simon & Schuster, and Macmillan Publishers, all members of the American Association of Publishers (AAP) filed the suit in reaction to Audible Captions, a machine learning tool that adds computer-generated text to some of its audiobooks. The project, launched in partnership with U.S. high schools, would allow listeners to read the generated text alongside the narration. 

Text is Text

However, according to the publishers and authors whose works are affected, Audible is purportedly basing their new service on their prior license, which only relates to the ability to “perform” the audiobooks of these works. This type of license is separate from the licenses offered for printed books and eBooks and was limited in scope to this type of use. 

Since Audible only secured the license for voice recording and playback, the publishers are contesting their use under the existing license. On the other hand, because AI was generating the text on the fly, Audible seemed to suggest that it was more similar to audio than to print. 

After arguing that this was a contractual rather than a copyright dispute and attempting to have the case thrown out of court, Audible recently announced that it had settled the suit. 

In fact, Audible capitulated. According to the AAP, Audible will seek permission from any AAP Members in good standing with the AAP before adding Audible Captions to their works. 

Both the Taylor Swift and Audible cases are at heart, straightforward copyright disputes. However, both illustrate the critical importance of understanding all of the rights that fall under copyright law. This is crucial information for both sellers and buyers.