On Monday, May 3, 2019, in the midst of the NBA finals, Kawhi Leonard of the Toronto Raptors filed a lawsuit against Nike, Inc. (Nike) in the US District Court Southern District of California. The complaint asks the Court for a declaration that Kawhi is the sole author of the “KL2” logo, that his use of that logo does not infringe the rights of Nike, and that Nike committed fraud in its copyright application. The “KL2” logo is sometimes referred to as the “Klaw” logo which is a nickname for Kawhi. Kawhi owns US trademark registration number 5608427 for the “KL2” logo for use with apparel. However, Nike owns US copyright registration number VA0002097900 for the “KL2” logo. Continue Reading
On June 13, 2019, the Cyberspace Administration of China (CMA, 国家互联网信息办公室), an office that serves as China’s central internet regulator and censor, released the draft Measures for Security Assessment of Cross-border Transfer of Personal Information (the Measure, 个人信息出境安全评估办法) for public comment.
Following is a brief analysis on how this Measure, if adopted, could affect U.S. entities doing business in China or doing business with Chinese entities. Continue Reading
In Part 2, we cover the key Intellectual Property issues that are emerging in this arena. Read part 1 here.
United States Patent and Trademark Office update
Following the enactment of the Farm Bill, the United States Patent and Trademark Office (USPTO) has officially issued guidelines when reviewing trademark applications for CBS and hemp-derived goods and services.
This is a big step for the cannabis industry as for many years, entities have tried, unsuccessfully, to legally protect their trademarks in connection with commercial cannabis businesses. The USPTO policy for many decades has been rigid in its dealing with cannabis related trademarks; the tolerance level being essentially none. Continue Reading
Two emerging issues related to commercial cannabis are taking center stage for industry stake holders in Ohio:
- Current legal status of hemp and cannabidiol (CBD) based products under state law
- How intellectual property rights will be protected
We will walk through both the background and current status related to these issues in this two part series.
Background: Hemp and CBD legal status in Ohio
Until recently, federal law did not differentiate hemp from marijuana meaning both were considered “marihuana” (the law dates back decades and uses an older spelling of the word marijuana) and outlawed as a Schedule I Controlled Substance. Late last year, Congress passed the Agriculture Improvement Act of 2018, otherwise known as the “Farm Bill”. The Farm Bill removed hemp from the definition of “marihuana,” effectively removing it from the Controlled Substances Act and paving the way for legalized hemp cultivation and sale. Continue Reading
On May 8, 2019, the Review Board of the U. S. Copyright Office issued a decision stating that Yeezy 350 Boost Version 1 and Yeezy 350 Boost Version 2 sneakers each include copyrightable subject matter. The Adidas Yeezy sneakers are a collaboration between Adidas AG and Kanye West which has been wildly popular and as a result has been frequently knocked off by imitators. So it is not surprising that Adidas AG pursued copyright protection for these sneakers. This decision by the U.S. Copyright Office clarifies that footwear designs can be perceived as two- or three-dimensional works of art separate from the footwear themselves. Thus, footwear designers clearly have the option of copyright protection for footwear designs having sufficient originality.
In 2017, Adidas AG filed applications for copyright registration of the Yeezy Boost 350 Version 1 and the Yeezy Boost 350 Version 2 which are shown above in photos from the decision. The U.S. Copyright Office initially rejected these applications because the sneakers were said to be “useful articles that do not contain any copyrightable authorship needed to sustain a claim to copyright.” Note that copyright law does not protect useful articles, such as clothing and footwear. See 17 U.S.C. § 101.
The FBI’s Internet Crime Complaint Center has released its 2018 annual report, which includes statistics that internet-enabled theft, wire fraud and exploitation were responsible for a staggering $2.7 billion in financial losses in 2018. If you are involved in transactional work, this can happen to you.
Reports detail an increasingly common story of wire fraud accompanying large sum transactions. The story line often includes a spoofed email invoice in connection with closing, which instructs one party to wire closing related expenses to a fraudulent account. As a result of the detailed and convincing invoice, one party loses their funds forever when they wire a large sum to the hacker’s offshore account.
What are the courts saying?
Recent news reported on a story about a hack that took place during a real estate closing. A law firm forwarded money to Deutsche Bank in accordance with instructions from a mortgage company. Through “mimicking” the e-mail address that the lender used, the hacker provided fraudulent wiring instructions to the law firm.
In rejecting the law firm’s complaint against the lender, the U.S. District Court for the Eastern District of Virginia ruled that state law does not allow companies to bring negligence claims against organizations that are hit with a data breach based on “a duty to safeguard the private information of another individual.” The court observed that its decision rests on a developing area of law: “whether or how to impose liability on a party whose potentially negligent conduct flows from a data breach.” Courts have come down on both sides of the issue, giving companies little clarity on who is liable for negligence after a data breach.
Red flags to watch for:
Above all, verifying the wire instructions verbally with the creditor/vendor can easily prevent loss in such scenarios. Through quick communication, parties can discover incorrect bank account information and avoid wire fraud. There are many indicia that point to suspicious e-mailed (or faxed) instructions. Here are a few red flags to keep in mind:
- A message from a Gmail or Hotmail account, especially late in a transaction
- A slight misspelling of words in the sender’s address or message
- Instructions that direct a wire to a foreign account, an account without the payee’s proper name, or an unknown bank
- Changing wire instructions
- Any “rush” transaction
These cases demonstrate the importance of maintaining adequate cyber insurance and the necessity of independently verifying all wire instructions transmitted through non-secure servers. Finally, calling a known telephone number is typically the safest way to verify information with any party to a matter.
Much has been written about the European General Data Protection Regulation (GDPR). Commentators have touted the EU’s supposedly superior data protection regimen. But don’t lose focus on what is happening within the U.S. and the implications for U.S. companies that may not be focused on GDPR requirements. Even companies that are GDPR focused may not meet the upcoming requirements. At least three significant privacy legislation fronts in the U.S. bear mentioning: Continue Reading
The United States Patent and Trademark Office (USPTO) offers valuable IP-related business resources through an intellectual property (IP) attaché program. The program is structured to generally improve IP policies, laws and regulations abroad for the benefit of U.S. businesses and stakeholders, while providing country-specific IP-related materials and services to teach and inform. However, the program also makes representatives available who can act as points of contact for U.S. businesses to guide actions and to provide interactions with foreign governmental entities to addresses country-specific IP-related legal issues.
On July 1, 2018, the United States Patent and Trademark Office (USPTO) began a 3-year pilot program known as The PCT Collaborative Search and Examination Pilot (CS&E) Program, to streamline examination and search procedures for patent examiners in multiple countries. The program is a coordinated effort with patent offices from around the world, together known as the IP5 offices. Specifically, participating International Search Authority (ISA) members include the USPTO, European Patent Office (EPO), Japan Patent Office (JPO), Korean Intellectual Property Office (KIPO), and State Intellectual Property Office of the People’s Republic of China (SIPO). This program is a continuation of two previous programs launched in 2010 and 2011, respectively, involving the USPTO, EPO and KIPO that laid the groundwork for this expanded program aimed at testing user interest, operational and quality standards, and the electronic platform.
Currently, upon filing a PCT application, applicants designate one of the IP5 offices to provide an international search report (ISR) and written opinion. However, upon reaching the national stage as applicants pursue applications in individual countries, applicants can be presented with country-specific search reports involving entirely new art depending on varying search criteria. This can place a burden on applicants and hinder cohesive world-wide prosecution strategies. The CS&E program addresses this issue by coordinating searches from each office, thereby providing a higher quality work product which is more likely to comprehensively identify and consider world-wide art. The CS&E program provides the advantages of having the searching performed by multiple examiners with different language capabilities and an increased predictability of outcome. Importantly, at this time the CS&E program requires no extra cost. Continue Reading
Implementing a cybersecurity framework may begin to pay off for companies doing business in Ohio. As anyone following data privacy litigation knows, litigation stemming from data breach incidents can prove to be extraordinarily burdensome and expensive. Ohio is the first state to pass a law that will limit a business’s exposure in data breach litigation if the businesses has voluntarily adopted an identified cybersecurity framework.
In terms of the particulars, Ohio recently passed S.B. 220, which provides an affirmative defense against tort claims to businesses sued by data breach plaintiffs. The law will be codified at R.C. 1354.01–1354.05 and will go into effect on Nov. 2, 2018.
The law will provide a business with a “legal safe harbor” if the business adopts and complies with a “recognized cybersecurity framework.” The act lists a number of qualifying safe harbor cybersecurity frameworks including, but not limited to: Continue Reading