The EU just passed its massively controversial overhaul of online copyright, how will this change affect you?

Over the past few months, the European Parliament was in discussions to overhaul copyright law across the EU. This new Copyright Directive passed by a slim margin of 348 to 274 and brought with its two very controversial clauses known as Article 13 (renamed Article 17 in the most recent draft of the legislation) and Article 11.  Nicknamed the upload filter, and link tax respectively, Article 13 and 11 are a vast deviation to the United States’ Digital Millennium Copyright Act (“DMCA”), and will greatly affect how US business’ operate in the region for the foreseeable future.

Article 11, known more commonly as the link tax allows publishers and rights holders to charge platforms when they display snippets of news. For example, services like Google News and Facebook could be forced to pay publishers for displays links and snippets of news stories. Google’s parent company, Alphabet was one of the largest critics against the new directive, claiming if news outlets charged for licenses to display the content already seen on Google News, Google will be forced to strip back the content it shows in search, and shutter Google News altogether. This is not the first time a country attempted a “link tax.” Both Spain and Germany attempted to introduce a link tax, and both times it was a complete failure.

The more well-known Article 13 (Article 17) was subject to a last-minute push to remove the clause from the final approved draft but was rejected by just 5 votes. Article 13 was publicized as the “death of memes”, unlike DMCA which grants protection so “service providers” like Youtube from the content posted by their users, Article 13 places new duties on service providers to prevent users from uploading copyrighted content. This leads to the unavoidable “upload filters” that will force online service providers like YouTube to spend significant funds to attempt actively police its own platform.

What more concerning is the text of the new Copyright Directive are vague at best, this is because EU
member states will have two years (2021), to adopt its own localized laws and policies enforcing the new directive. While the law may have been well-intended in an effort to empower rights holders, the reality reveals a true lack of understanding for free speech and an open internet. Advocates for the directive claim this the EU’s answer the dominance of US tech giants over online spaces. PSL disagrees, and it’s our opinion that this new directive will stifle innovation, and the openness we’ve come to know about the internet.

How does this affect US-based companies?  Anyone developing a platform with EU users that involves content or link sharing will face massive uncertainty. The ramifications of this new directive include blocking features or preventing the development of features that internet users currently expect, and in exchange will force companies to now implement a very expensive ineffective and inaccurate automated filtering systems.  Without a doubt, this new directive will have a negative effect on the EU’s digital economies.

How will this effect streamers, and content creators? The rollout of the new directive across the EU over the next two years will tell the story. However, PSL predicts this will have a massive effect on live streaming altogether. It’s very possible we will see a world were  EU citizens will no longer have access to US-based live streams, and live streaming services such as Twitch.  The expense imposed by the directive to police content for copyrighted material may be too much for service providers like Twitch, and in turn, may opt for blocking EU access to US-based streams and content.  For now, it’s a massive wait and see game.

Press Start Legal provides legal services to the interactive entertainment industry.  Our Clients span across multiple forms of interactive entertainment from Streaming, Content Creation, to Video Game development and more. If your need for legal services and want a free consultation send us an e-mail to NewClient@PressStartLegal.com to set up a call today.

Copyright’s Owners Must Register Before Enforcing Their Rights. An Enforcement of an Age Old Rule, and the End of a Circuit Split.

C                On Monday, March 4 2019, the United States Supreme Court resolved a long-standing circuit split regarding when a party can sue for copyright infringement. What’s the split? For some time, several United States Circuit Courts allowed a party to bring an action for copyright infringement before the Copyright Office has issued or denied a parties copyright registration application. This was because it takes an estimated 7 months from the date of filing to the date of registration.  The issue is, this circuit split was not supported by the plain text of Section 411(a) of the Copyright Act which states registration is a prerequisite to suit, not merely filing the application.

                This was the central issue in Fourth Estate Public Benefit Corp v. Wall-Street.com, LLC, where Fourth Estate sued Wall-Steet.com for copyright infringement as a result of hosting various news articles Wall-Street.com no longer had permission or a license to display on its site.  The kicker here was Fourth Estate had yet to receive a registration certificate for the various articles, and Wall-Street sought to dismiss the case because Fourth Estate had yet to comply with the prerequisite to bring its claim. Justice Ginsburg, drafting the Court’s unanimous ruling stated it’s the role of Congress to correct the long delay at the copyright office and not the Courts.

How Does this Change Effect You?

In the United States once a work of authorship is recorded on a fixed medium you have a copyrightable asset.  To protect that asset from infringement, or to enforce your exclusive rights in that asset you must file for a copyright with the United States Copyright Office.  Now, time is a large factor when thinking about protecting your IP. As a developer or content creator, you will need to factor the additional time required to secure a copyright registration prior to commencing an infringement action.

For Developer Studio’s this enforcement of registration as a prerequisite should shift your thinking from protecting your IP once everything is finished to taking an as we go approach to protecting your copyrightable IP, and planning your developments legal budget for the year. As a studio, as parts of your project reach completion filing registrations in a proactive approach will save you time in the event you are forced to enforce your copyrights.

What if I am suffering from infringement now, do I still need to wait? What are my options?

                If you’re currently suffering from infringers don’t worry, there are options and paths for you depending on budget and type of work. The Copyright Act does allow for very limited exceptions applicable to certain categories of copyrightable assets. If you’re a copyright owner who is preparing to distribute work that is vulnerable to predistribution infringement, you may apply to the Copyright Office for preregistration. What type of works are these? Works that are vulnerable to predistribution infringement typically include movies or musical compositions.  Another exception extends to live broadcasts, however, the copyright owner must eventually pursue registration for their claims in order to maintain their suit for infringement.

If you don’t fall into those categories there is another option around the 7 months estimated wait for registration. Copyright owners can opt for an expedited application review process called special handling, that results in the Copyright Office evaluating the if a work can be registered quickly, sometimes in less than 5 business days. To meet this special handling review a copyright owner must: have an acceptable application, an acceptable deposit, and a nonrefundable filing fee of $800 per claim.  If this falls out of your budget, and you’re forced to wait the 7 plus months for a registration certificate fear not. The Court in its ruling recognized this issue and will allow a Copyright owner to recover for both pre and post-registration infringement.

Press Start Legal’s team of intellectual property lawyers advises its clients on a broad range of copyright protection and enforcement strategies.  Are you looking how to best protect your intellectual property within your business needs? Feel free to reach out to Zachary Rich at PressStart.Legal for a free consultation on how we can help you and your business protect your brand and all of your hard work.

Digital Dance Moves… the newest wave of litigation to hit Fortnite creator Epic games. Do these creators have a case, or is this a failed attempt to change the law?

Over the past few months, Epic Games the creators of Fornite saw an increase in the negative press over the Fortnite’s use and sale of digital dance moves via Fortnite’s in-game store. A number of creators came out against Fornite’s practice claiming Epic Games “stole the creator’s intellectual property, and is profiting off its use.”  Famous rapper, Terrence Ferguson a.k.a 2 Milly, Actor Alfonso Ribeiro, known as Carlon from the TV Fresh Prince, and even the mother of “Orange Shirt Kid” all filed copyright infringement cases against Epic Games claiming the studio willfully copied their various dance moves. Each case is seeking damages from Epic Games for the sale of the digitally recreated dance moves that Epic subsequently sold to the Fortnite player base.  Do these Plaintiffs have an actual case, or is this an attempt to force the courts to reinterpret the Copyright Act of 1976?

To answer the question we first must determine if a dance move can be copyrighted? For a work to qualify for copyright it must (1) be an original work of authorship or artistic expression, (2) fixed in a tangible medium of expression.  (17 U.S.C.A. §101) Copyrightable subject matter includes literary works, musical works, dramatic works, pantomimes, and choreographic works, and several other forms of artistic expression.  We are only going to focus on one, choreographic works.  The United States Copyright Office defines choreographic works as “the composition and arrangement of dance movements and patterns and is usually intended to be accompanied by music. (Compendium of Copyright Office Practices, Compendium II § 450.01 (1984)). Most importantly.

This leads up to the most important question, Can a single dance move or a simple routine of dance moves qualify for protection as a choreographic work? Does copyright protection expands to 2 Milly, Carlton, and the Orange Shirt Kid, and if so do they have the right to sue Epic for damages for subsequently “copying” these dance moves, and selling them via the Fortnite in-game store?

One of the important cases in examining these questions is Horgan v. MacMillan, a case concerning the alleged infringement of the copyright in George Balanchine’s choreographic works for the Nutcracker ballet. The Second Circuit when examining the Copyright Act and the legislative reports held social dance steps and simple routines are not copyrightable. H.R.Rep. No. 1476, 94th Cong., 2d Sess. 53–54, reprinted in 1976 U.S.Code Cong. & Ad.News 5659, 5666–67. The Compendium of Copyright Office Practices, Compendium II (1984) The Court detailed that Section 450.03(a) explains:

“the basic waltz step, the hustle step, and the second position of classical ballet are not copyrightable. However, this is not a restriction against the incorporation of social dance steps and simple routines, as such, in an otherwise registrable choreographic work. Social dance steps, folk dance steps, and individual ballet steps alike may be utilized as the choreographer’s basic material in much the same way that words are the writer’s basic material.”

                The Court in Horgan indicates that the definition of what is a choreographic work and what is a simple dance move has to do with the “the flow of the steps.”  

                Now let’s apply the Horgan standard to the current cases against Epic. Do these cases, looking from purely a copyright infringement stand-point hold up? The answer has to be no. The Carlton, the Milly, the Orange Justice all of these moves are just that, a simple dance move. This is no different from the waltz, the hustle, etc. Yes, people do associate the move with a person or character, but is that alone enough for copyright protections? The answer still is no. While other claims could exist like a right of publicity, and likeness, that’s not what we are examining in this post. So what are these individuals doing going after Epic if the current legal standards don’t support their case? Clearly, they’re upset that someone is profiting off their dance move. Was it right for Epic to not compensate the creators? I can’t answer that, it’s something we call in legal industry as a “business decision.”  Was it illegal, does it entitle these individuals to damages, based on what we examined above, the answer is no.

                Do you have any questions about your game, its copyrights or other intellectual property? Send us an E-mail and let up a free consultation with one of our attorneys!

What happens when E-Sports Team and an Apparel Company battle over trademark rights?

Last week’s blog post detailed the importance of Trademarks, and why every brand owner needs to file an application to register their Trademarks to protect their brand. This week we are going to explore what happens when a brand owner and a famous ESports team collide in court over the use of the brand owner’s trademark, and what type of damages the brand owner can seek from the ESports team if infringement is found. As always nothing in this blog spot should be treated as providing legal advice, and reading the Press Start Legal blog posts does not create an attorney-client relationship.

The Backstory.

FaZe Clan Inc. a California company and E-Sports team is one of the most well know E-Sports organization based on the company’s social media followings. FaZe Clan regularly competes in live events and tournaments for popular games like Call of Duty, Fortnite, Overwatch, and Counterstrike. Faze Apparel is a clothing and accessories brand founded in 2007 in San Francisco California. Faze Apparel uses its Faze brand to create a number of clothing options such as shirts, hats, and other accessories including phone cases. Since 2007, Gaze Apparel prominently featured their registered trademark FAZE and F.A.Z.E as their dominant design element and a source identifier.

The Start of a Battle.

As early as 2008, Faze Apparel filed for a design mark for F.A.Z.E (U.S. Reg. No.: 3680738), and in 2013 Faze Apparel filed for a word mark for FAZE (U.S. Reg. No.: 4550118). Both marks registered by Faze Apparel are in International Class 25, includes most types of clothing, footwear, and headgear.  At the same time in 2013, as FaZe Clan’s popularity started growing, and the California E-Sports team looked to file FAZE and Faze Clan Sniping with trademarks in International Class 25. Both applications were rejected by a USPTO examiner citing the that FaZe Clan marks were confusingly similar to Faze Apparel’s registered Faze Marks already in Class 25.  In July of 2013, FaZe Clan again applied to register the FAZE CLAN mark in both Class 41 (Video Games) and Class 25 (Clothing).  Faze Apparel filed Opposition with the Trademark Trial and Appeal Board which in 2016 entered judgment in favor of FAZE Apparel, that the FAZE CLAN mark is confusingly similar to Faze Apparel’s registered Faze mark in Class 25.

Between 2014 to Present FaZe Clan and Faze Apparel have been embodied in a battle over the rights to use “faze” with clothing. According to a recent lawsuit filed by Faze Apparel, FaZe Clan repeatedly used the Faze mark in a number of clothing items sold on its online store, and through a  third party, Electronic Gamers’ League. Now brand owner, Faze Apparel had enough and filed an infringement suit alleging FaZe Clan engaged in Trademark Infringement and Counterfeiting, Unfair Competition and False Designation of Origin.

Trademark Infringement, the Weapon of War.

This case is a textbook example of why it’s so important for brand owners to registered your marks, and protect your brand. An infringement case such as the one discussed above is no joke and can involve serious penalties and statutory damages. What are statutory damages, and why are they so important in trademark cases? Statutory damages are a special situation where a plaintiff in a lawsuit does not have to prove actual damages, but can instead look to a statute or in this case the Lanham Act, for damages.

Section 35 of the Lanham Act, sets forth monetary remedies for trademark infringement, unfair competition, use of a counterfeit mark, and willful trademark dilution. (15 U.S.C. § 1117) While §1117 (a) and (b) focuses on a plaintiff’s actual damages, a plaintiff can elect to seek statutory damages. (15 U.S.C. § 1117(c)) Congress’ reasoning behind §1117(c) reflects situations where infringers and/or counterfeits records of sales are more often nonexistent and makes proving actual damages extremely difficult if not impossible in most cases.

The Fruits of War

Let’s jump forward in time, and let’s assume that Faze Apparel proved FaZe Clan engaged in trademark infringement and counterfeiting as defined by section 15 U.S.C. § 1116(d)(1)(B)(i). What can Faze Apparel recover if they elected for statutory damages under the Lanham Act?  Under 15 U.S.C. § 1117(c) statutory damages for counterfeiting are to amount to not less than $1,000 or more than $200,000 per counterfeit mark, per type of goods or services sold, offered for sale, or distributed.  Additionally, if the Court finds that the use of the infringing/counterfeit mark was willful, meaning FaZe Clan used Faze Apparel’s registered marks knowing that they did not have the authority to do so, then the damages ceiling is raised to $2,000,000 per counterfeit. That’s a lot of money for each type of good sold in International Class 25 that infringed on Faze Apparels marks.

Now, this is all hypothetical, as this case is still ongoing and we will not know the outcome until the Court makes a ruling. It’s hard to look at the numbers in willful infringement cases, and wrap your head around why a company would take a risk and infringement on someone’s registered marks. This is why brand owners must seek registration on their brands, as just these numbers alone are a deterrent for anyone seeking to infringe on your registered marks.

Press Start Legal’s team of trained attorneys can help assist in every aspect of the registration processes. From the initial search to filing your application you can trust our team to get the job done right. If you have any questions about Trademarks or you’re seeking to register a new mark feel free to contact us at Info@PressStartLegal.com

5 Things Every Brand Owner Needs to Know About Trademarks.

Whether you are starting a new brand or have an existing one, getting a Registered Trademark is one of the most important steps you can take to protect your brands! A Trademark identifies a single source of origin for your goods or services and gives you a mechanism for distinguishing your goods and services from those of others. Most importantly, it provides you with the right to prevent others from adopting a similar name and/or logo likely to cause confusion among the marketplace.

  1. Types of Trademarks

In the United States, a Trademark can be a word, name, symbol or a device, and in some circumstances, it can be a color, a sound, or a scent. For example, among John Deer has a Trademark on their signature color green or the popular jewelry store Tiffany & Co. has a trademark for their famous “Tiffany Blue.” Other famous Trademarks include the Nike Swoosh, Apple’s gray apple, the MacDonald’s golden arches, and the NFL shield.

For brand owners getting a registered trademark for your business name, your brands, and your logos are steps you need to take to protect your reputation and intellectual property.

  1. Trademark Requirements

Just having a brand is not enough to qualify for a Trademark. Your brand must be both distinctive, and it must be used in “interstate commerce.”  Distinctiveness is the ability of your brand to identify you as the single source of goods or services. Interstate Commerce achieved when your brand is used to sell your product or services among multiple states. This is important because if you’re a local shop, you may not qualify for Federal Trademark if you only offer your goods and services within your State. That said it may still be possible for you to get State-level protection.

  1. Eligibility for Registration with the United States Patent and Trademark Office.

Not all words, symbols and logos can be registered as a trademark. The USPTO, regulations have certain subject matters that may not be registered under ant circumstances including: marks likely to cause confusion with a previously used or registered mark, deceptive matter, function matters, matter that falsely suggests a connection with a person or institution, government insignia, or names/portraits and signatures identifying living individuals without their written consent. Additionally, certain brands may only be registered after a showing of acquired distinctiveness such as merely descriptive goods or services, primarily geographically descriptive, and primarily a surname.

  1. Advantages of having a registered trademark.

Registering your brand as a federal trademark with the USPTO comes with a multitude of advantages when it comes to enforcing your rights. A registered trademark carries with it evidence that your trademark is valid and you or your company have ownership of that mark. Additional registration advantages include nationwide use of the mark, statutory removers for infringement claims such as treble damages and recovery of attorney’s fees and costs, the right to use ®, and after 5 years your mark can become incontestable. For brand owners of goods, after registration, you may file your mark(s) with US Customs to stop the importation of infringing/counterfeit goods.

  1. Avoid Online Trademark Services

Every day I notice Facebook ads and google ads postings stating they will file your trademark for $69.99, and so many people are tagging their friends, and sharing the posts because they think they are getting such a great deal.  It’s time to stop and read the fine print on the ads. These online services are not law firms, nor do they have attorneys looking at your filings and offering you a legal option. In fact, one of these services state on the FAQ section of their website “is not a law firm and none of the information on this website constitutes or is intended to convey legal advice.”

So what do you get for $69.99 service (plus filing fees), they do a direct hit search, and that’s it.  In fact, as you move up the services offered, the basic, standard and deluxe packages are all the same, it’s a direct hit search. What does this mean exactly? They type in your mark into USPTO trademark search engine and see what comes up if nothing they file your mark. However, just doing a direct search is not doing you justice! This is why hiring a law firm is the correct way to go! Press Start Legal doesn’t just do a direct search, we do a full knock out in your class of goods for all marks that may be similar to yours. Why does this matter? While a direct search may show it’s clear, our type of search will uncover any mark that is similar. A similar mark can cause confusion in the marketplace and may prevent you from filing your mark, or worse may subject you to infringement actions down the road.

Another issue with these online trademark services, is if for any reason the USPTO examiner issues an office action regarding your applied mark for any reason, the trademark services company will say so sorry, get a lawyer to handle this! Don’t be fooled by cheap deals, and hire Press Start Legal to handle all of your trademark needs!

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