Are you familiar with the recent dispute between Cohiba and Cohiba? It's a tale that reads like a legal drama - with twists and turns that left even the most seasoned legal professionals reeling.

The backstory of the case dates back to 1963 when General Cigar Co. registered the COHIBA mark for cigars sold in the United States, while a Cuban company, Empresa Cubana del Tabaco, registered the same mark in Cuba. Over the years, the two companies have been engaged in various legal battles, including a lawsuit that went all the way to the U.S. Supreme Court.

In this particular case, the TTAB found that the Cuban company's mark had acquired distinctiveness in the United States through sales to American visitors to Cuba and was entitled to protection under the Lanham Act. The TTAB also determined that General Cigar Co.'s use of the mark was likely to cause confusion with the Cuban company's mark, leading to the cancellation of General Cigar's registration.

This decision has significant implications for businesses that deal with trademarks, especially those in the tobacco industry, and it highlights the importance of ensuring that any trademark used by a business is properly registered and protected within the United States.

If you or your business needs assistance with trademark or intellectual property matters, please do not hesitate to contact the experienced attorneys at Gugliotta & Gugliotta, LPA. We specialize in helping businesses of all sizes with their legal needs, and we are ready to help you today.

Gugliotta & Gugliotta, LPA publishes this blog for educational and/or promotional purposes only, not to provide specific legal advice. By using this blog site, you indicate that you understand there is no attorney-client relationship between you and Gugliotta & Gugliotta, LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Gugliotta & Gugliotta, LPA, nor any of our clients.

Jack Daniel's found itself in the middle of a Supreme Court case. The dispute revolved around a dog toy called Bad Spaniels, which featured a design similar to the famous Jack Daniel's label. According to NPR, the toy's maker claimed that it was a parody, but Jack Daniel's disagreed and sued for trademark infringement.

The Supreme Court ultimately declined to hear the case, leaving a lower court's ruling in favor of Jack Daniel's intact. The decision emphasized the importance of protecting trademarks and the potential harm that can come from unauthorized use of a well-known brand's image.

While this case may seem like an oddity, it highlights the importance of trademark law in protecting businesses and preventing confusion among consumers. Trademarks are essential to establishing a brand's identity and reputation and can be crucial to a company's success in the marketplace.

If you are a business owner or entrepreneur, it is crucial to understand the basics of trademark law and how it can affect your operations. At Gugliotta & Gugliotta, L.P.A., we have experienced and licensed copyright and trademark attorneys who can help you navigate this complex area of the law and protect your intellectual property.

If you have any questions or concerns about trademark law, we invite you to contact us today. Our team is ready to provide the legal assistance and guidance you need to succeed in the competitive world of business.

A novel position came across the United States Distdict Court for the District of Washington, D.C.: Should the U.S. Grant copyright protection to AI-generated inventions and designs? At least one man, Stephen Thaler, the president and CEO of Imagination Engines, believes so.

The Complaint

In 2018, Thaler filed a copyright application covering an AI-generated work produced by one of his AI systems called the Creativity Machine. “A Recent Entrance to Paradise”, as it was so titled, is one part of a series of works depicting a simulated near-death experience.

“A Recent Entrance to Paradise” by the Creativity Machine.

The best laid plans going astray, as they are often wont to do, the Copyright Office rejected that application on the basis that no human had authored the work. Thaler, in response, sued the United States Copyright Office, alleging that the Office’s denial of his copyright registration is “arbitrary and capricious” and not in line with existing law.

Mr. Thaler is no stranger to the advocacy of AI’s right to authorship under U.S. intellectual property laws. Indeed, Mr. Thaler recently appeared before the U.S. Court of Appeals for the Federal Circuit, arguing that his AI system “DABUS” is entitled to patent protection over two inventions it generated—one covering an improved beverage container and another covering a “neural flame” device to be used by search and rescue teams.

The Copyright Act, for its part, grants protection over “original works of authorship.” Mr. Thaler contends that the Copyright Act does not limit authorship to natural, human persons. The question then remains, however, as to what *does* constitute "authorship" for the purposes of U.S. Copyright Law? If a Court were to grant Mr. Thaler's AI's their copyrights, would the United States unknowingly be granting the right of authorship to all non-human entities? A similar case raised similar issues, namely a macaque monkey named Naruto, who took a "selfie" photograph. In that instances, the Ninth Circuit rejected the monkey's (or, a human with Naruto's best interests at heart) quest to obtain copyright ownership over his selfie.

Selfie taken by Naruto, a macaque monkey, with a camera owned by photographer David Slater.

What’s Next?

Throughout history, the question of an AI’s ability to create a work of authorship has not been an issue. Only recently have AI systems advanced to the point of being able to engage in the creative process without further human direction or interaction. Indeed, between 2002 and 2018, annual patent applications covering AI systems doubled from 30,000 to 60,000, with the overall share of patent applications which contain AI systems increased from 9 percdent to approximatelly 16 percent.

The outcome of Mr. Thaler’s lawsuits will have rippling effects on all creators who use AI in the course of authorship. With AI systems already being used to generate music, games, art, and prose, such works would be deems devoid of copyright if the courts maintain that direct human involvement is essential foe the creation of a work of authorship. While the courts should be extremely cautious in opening an intended can of worms, it is clear that the status quo indeed needs to change—to some degree—with the times. Indeed, should AI systems ultimately lose this battle in court, all works created by them could be used freely by anybody, despite the dramatic invetsments in AI systems that companies and individuals alike are contributing. This could end up have a chilling effect on the rate of progress in such markets.

As with most things in life, perhaps the answer is more complex than “sure, all AI-generated works are entitled to protection with the AI system as the proper author”. What is clear, however, is that the U.S. Copyright Law is beginning the end game of a game of chicken with the AI-driven economy of the future. The questions of AI authorship is not one that is likely going away any time soon, save for a dramatic reworking of the U.S. Copyright Law.

[View a copy of Mr. Thaler's complaint]

If you have any questions about hiring experienced and licensed U.S. copyright and trademark attorneys to represent you in front of the Copyright Office and/or the USPTO, we would be happy to discuss with you further! Please contact Gugliotta & Gugliotta, L.P.A. here, by phone at (888) 298-8580, by email at hello@inventorshelp.com, or by mail at 55 S. Miller Road | Ste. 203, Akron, OH 44286.

Gugliotta & Gugliotta, LPA publishes this blog for educational and/or promotional purposes only, not to provide specific legal advice. By using this blog site, you indicate that you understand there is no attorney-client relationship between you and Gugliotta & Gugliotta, LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Gugliotta & Gugliotta, LPA, nor any of our clients.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES ACT”) was signed into law by the President on March 27, 2020. The CARES Act provides many important emergency economic relief programs for American employers, employees, and hospitals, including the Paycheck Protection Program (“PPP”), a fund of $349 billion allocated to prevent job losses and small business devastation due to the losses caused by COVID-19 pandemic and the necessary governmental responses.

This new PPP loan program is available to many types of eligible employers, including but not limited to sole proprietorships, non-profits, veterans’ organizations, and tribal business concerns, and seeks to provide forgivable loans in an effort to cover payroll expenses and other basic and mandatory operational expenses. The CARES Act doesn’t stop there, also expanding the Economic Injury Disaster Loan (“EIDL”) Program with an additional $10 billion in funding.

When planning a strategy to weather this COVID-19 pandemic, businesses like yours should understand both programs, in addition to all of the other various financial reliefs that may be available under the CARES Act. Given the complex nature of the qualification criterion, the differing programs, and the various incentives codified by the CARES Act, each business’s application options should be evaluated separately and individually, taking into consideration the relevant industry, legal requirements, financial considerations, and other obligations during this unprecedented time in world history.

The Paycheck Protection Program (“PPP”)

Loans provided to employers under the PPP are fully guaranteed by the federal government, and will become available to small businesses beginning on April 3, 2020 through the PPP Application. These loans are intended to allow employers to maintain their pre-pandemic payroll figures, and allow for partial or full loan forgiveness, provided that the funds are used for eligible purposes (more on this below). These loans will be available through June 30, 2020 in order to help eligible employers maintain the following expenses:

• Payroll

• Health care benefits

• Health care insurance premiums

• Rent and utility expenses

• Employee compensation

• Mortgage interest obligations

• Interest on debt which occurred prior to the loan

According to updated SBA guidance, at least 75% of the forgiven amount must have been used for payroll.

There is, however, a maximum principal amount that each employer is limited to taking. The maximum amount of a PP loan will be $10 million, 2.5 times the average 2018 payroll costs (minus any compensation paid to an employee in excess of $100,000/year, or any amounts paid to an independent contractor or sole proprietor over $100,000/year), whichever of the two is lower. Payroll costs, for the purposes of PPP Loans, include salaries/wages/tips which are capped at $100,000 annualized for each employee, paid time off, sick and family leave pay, allowance for separation or dismissal, payment of retirement benefits, payments of health insurance benefits and premiums, and all state and local taxes assessed on the employees’ compensation. If you are a sole proprietor or an independent contractor, wages, commissions, income, or net earning from self employment are capped at $100,000 annualized for each employee. Unlike many SBA loans, these PPP loans are unsecured loans which require absolutely no collateral, no personal guarantees for repayment, and no need to show that the employer is out of options with no other credit available elsewhere. To the extent that a PPP loan is ultimately not forgiven in full, these loans have a 2 year term and an interest rate of 1.0%. These loans will be made available through lenders approved by the SBA and will include a 6 month deferment on payment of the principal, interest, and fees.

Small business employers will be able to apply through any existing SBA 7(a) lender, or through any participating federally-insured depository institution, federally insured credit union, or Farm Credit System institution, all of which were set to begin processing applications on April 3, 2020, but it appears that many of the largest lenders have been unable to begin processing applications by that date.

Loan Forgiveness

A PPP borrower is eligible for loan forgiveness on amount spent during an 8-week period after the origination date on rent, defined payroll costs, mortgage interest, and utilities (all subject to proper documentation). The amount forgiven cannot exceed the principal amount of the loan. However, the amount ultimately forgiven will decrease if the borrower reduces either the size of its workforce or the salaries/wages of its employees making less than $100,000 per year during that 8-week window after the loan’s origination date. This deduction will not apply to the extent that the borrower restores their workforce count and salaries/wages by June 30, 2020. Further, pursuant to additional federal guidance, the government has decided that to be eligible for loan forgiveness, the borrower must have spent at least 75% of the PPP loan amount on payroll expenses.

Eligibility

Employers are eligible for a PPP loan if they are either a small business concern under SBA regulations, or a business concern, nonprofit organization, veterans’ organization, or Tribal business concern that employs fewer than 501 employees (alternatively, the number of employees in a size standard to the application industry, which could be up to 1500 employees, depending on industry). If an employer is part of the Accommodation and Food Services Industry and has more than 500 employees, it can still take advantage of PPP loans if it can show that it has fewer than 501 employees per location.

Of particular note is that the CARES Act waives the SBA’s usual affiliation rules for determining PPP eligibility among certain categories of employers, including businesses in the Accommodation and Food Services Industry, those operating as a franchise and which are assigned a franchise ID code in the SBA Franchise Directory, and any employer that receives any sort of financial assistance through a licensed Small Business Investment Company. Due to this limited waiver, and subject to further guidance that we expect from the SBA in the coming days or weeks, the remainder of eligible employers are seemingly subject to the SBA’s affiliation rules, which would act to aggregate the number of an applicant’s full-time and part-time employees with those of their domestic and foreign affiliates. Attempting to identify which companies may qualify as an “affiliate” is a fact-specific and intense inquiry, but in general terms any ability to control a business concern leans towards an affiliate relationship. Additional guidance expected from the SBA should clarify how the SBA will apply its affiliation rules to applicants of PPP loans.

Finally, to be eligible an employer needs to have been operating on February 15, 2020 and must have had employees being paid salaries and payroll taxes or independent contractors as of February 15, 2020. When applying for a PPP loan, the applicant must certify that the uncertain nature of these current economic conditions makes the loan request necessary to effectuate on-going operations, and acknowledge that the funds will be used to retain the employer’s workforce and maintain payroll levels and make mortgage/lease and utility payments.

In order to apply for a PPP loan, the applicant will need to submit documentation to the lender in order to establish eligibility. For example, this can include payroll processor records, payroll tax filings, for Form 1099-MISC, or income and expenses from a sole proprietorship. If you do not have any such documents in your possession, you will have to provide the lender with other supporting documentation necessary to show a qualifying payroll amount, such as bank records.

Ineligibility

Some factors will make you ineligible, even if you otherwise meet the eligibility requirements described above. For example, if you are engaged in illegal activity under federal, state, or local law you will be ineligible for a PPP loan. If you are a household employer—somebody who employs household employees such as housekeepers and nannies—you will be ineligible for a PPP loan. If any owner with more than 20% interest in the company is incarcerated, on probation, or parole; presently subject to an indictment, criminal information, arraignment, or other means by which federal criminal charges are brought in any jurisdiction; or has been convicted of a felony within the last 5 years, you will be ineligible. If you, or any business owned for control by you or your owners, has ever obtained a direct or guaranteed SBA loan, or a loan from any other federal agency, and that loan is currently delinquent or you have defaulted on it within the last 7 years and caused a loss to the government, you will be ineligible for a PPP loan.

Independent Contractors and Sole Proprietors

When calculating an employer’s payroll cost for independent contractors and/or sole proprietorships, payroll costs consist of wages, commissions, income, or net earning from self-employment or similar compensation.

For companies determining their employee count for the purpose of a PPP loan, independent contractors do not count, since independent contractors have the ability to apply for a PPP loan by themselves. Thus, they will not count as an employee, for the purposes of a borrower’s PPP loan calculation.

Agent/Attorney Role and Fees

Pursuant to federal guidance, an agent is any representative who assists a borrower (such an an attorney, consultant, accountant, or other authorized representative acting on the borrower’s behalf before the SBA). Agent fees are subject to a maximum amount imposed by the government. Importantly, if you are a borrower, the agent cannot collect fees associated with the application preparation and/or referral to a lender from you directly. Instead, these fees are paid by the lending institution, out of the fees paid to the lender by the government. Agent fees for preparing an application (including referral to the lender) cannot exceed: 1.0% of the total loan amount for loans up to $350,000; 0.50% of the total loan amount for loans between $350,000.01 and $2,000,000; or 0.25% of the total loan amount for loans in excess of $2 million. It appears that agents are free to collect additional fees directly from the borrower for services outside of preparing a PPP application (such as consultation, loan forgiveness compliance advise, and work preformed to seek loan forgiveness). However, PPP loan proceeds cannot be used to pay these types of additional fees.

Economic Injury Disaster Loan (“EIDL”) Program

Another option for small business employers in these uncertain market conditions is the SBA’s EIDL Program, which was further expanded by the CARES Act and provides longer-term loans while maintaining favorable terms for borrowers. Companies in all 50 states, D.C., and some U.S. territories are eligible for EIDL loans if they have suffered economic injury directly as a result of the ongoing COVID-19 pandemic. EIDL's notably do not allow for loan forgiveness—unlike PPP loans. Borrowers with existing EIDL loans incurred because of the COVID-19 pandemic can refinance under these new terms. Employers may be eligible for loans under both EIDL and PPP. However, employers will be unable to seek economic recover under an EIDL loan for the same costs which are covered by a PPP loan.

Eligibility

EIDL eligibility has been expanded between January 31, 2020 and December 31, 2020 to include any business with fewer than 501 employees, any individual operating as a sole proprietorship or as an independent contractor, along with any cooperative, ESOP, or tribal small business concern with fewer than 501 employees. These applicants are also seemingly subject to SBA rules on affiliation, subject to additional forthcoming guidance from the SBA. All entities which were previously eligible for EIDL loans remain eligible under the most favorable terms authorized by the CARES Act.

Employers must have suffered a “substantial economic injury” caused by COVID-19 in order to qualify for EIDL loans. These are based upon the employer’s actual economic injury, as determined by the SBA (minus any recoveries, such as insurance proceeds), and is capped at $2 million. Employers can use EIDL loans for payroll and other costs, and also to cover increased expenses resulting from supply chain interruptions, paying obligations that cannot otherwise be met as a result of revenue loss, and for other uses. EIDL loan interest rates are fixed at 3.75% for small business and at 2.75% for non-profits. EIDL loans have up to a 30-year term and amortization.

Advance Payments

CARES Act now allows applicants to request an advance sum of no more than $10,000 to pay allowable operational expenses. The SBA will pay these advances within 3 days. Bare bones, these advances are similar to a grant, to the extent that they do not need to be repaid — even if the loan application is ultimately denied. One caveat, however, is that any such advanced payment will be deducted from any sort of loan forgiveness under a PPP loan.

Waived Requirements

The CARES Act does not require EIDL loans to have a personal guarantee if the principal amount is $200,000 or less. However, personal guarantees are required from owners with more than 20% ownership of the borrower for any loans in excess of that amount. CARES Act also waives the prior requirement for the borrower to show that it is “out of options” and that it cannot find credit from other sources. Without further guidance from the SBA, it seems as if the collateral requirement for loans in excess of $25,000 still applies. When processing an applicant’s application, the SBA must determine the applicant’s credit-worthiness. However, these applications can be approved based exclusively on the applicant’s credit score, or by other means of determining the applicant’s ability to repay the loan amount. This can be done without requiring the applicant to submit tax returns, thus greatly speeding up the approval processing time for EIDL during the covered period.

Use of Funds

Unlike PPP Loans, employers can use EIDL loans to pay fixed debts; payroll expenses, accounts payable, as well as any other bills that may go unpaid as a result of the COVID-19 disaster. However, employers cannot use EIDL loan funds to refinance, expand the business, grow the business in any way, or or implement improvements to company infrastructure.

Ultimately, both the PPP and the EIDL loan programs offer very favorable terms for employers, in addition to potential loan forgiveness. Eligible small business employers who have seen their bottom lines dramatically impacted by the COVID-19 pandemic and global responses should certainly consider applying for one or both of these new types of expanded loans. EIDL loan applications are submitted directly through the SBA, while PPP loan applications will soon be available from lenders approved by the SBA.

We recommend acting as quickly as possible! It appears that the funds currently allocated for these programs will run out quickly — in perhaps as little as 1 month. If you feel the need, obtaining legal representation in this situation (whether from our firm or elsewhere) can help to avoid any common mistakes and ensure that your business can put together a sound strategy for weathering the current economic conditions.

Update March 31, 2020 at 11:06 PM: Updated to reflect newly issued SBA guidance on loan maturity, interest rate, and loan amounts.

Updated April 1, 2020 at 1:17 PM: The SBA has finalized the PPP loan application. All eligible applicants should speak with their lenders directly for a list of information the lender will need to process the application. We have also updated the article to comply with the Treasury Department’s new guidance on maximum loan amounts.

Updated April 3, 2020 at 9:18 AM: Updated to reflect additional eligibility guidance, the treatment of independent contractors, and the ability of agent representation and payment, pursuant to guidance issued by the SBA in 13 CFE Part 120 “Business Loan Program Temporary Changes; Paycheck Protection Program”

The unprecedented coronavirus (COVID-19) continues to cause chaos not only in hospitals across the country, but also on entire markets and industries. This has meant that many businesses must now face previously unthinkable challenged — for example, their entire business being ordered by the government to halt operations. In order to help serve our clients and Ohioians as a whole, Gugliotta & Gugliotta has put together a team and has created many topic-specific client resources (see Gugliotta & Gugliotta’s COVID-19 Emergency Resource Headquarters). We understand that these are not only challenging times, but also confusing times as well. For that end, we are prepared to help our clients’ legal and business needs resulting from the coronavirus COVID-19 pandemic, no matter which industry our clients may hail from — manufacturing, technology, hospitality, travel, entertainment, dining, health care, fashion, apparel, consumer goods, sports, and more.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)

In a rare and much-needed display of bi-partisanship, the Senate passed the CARES ACT unanimously (96–0) on March 25, 2020. The CARES Act represents the third—and by far the largest, with a price tag of $2.5 trillion— phase of the federal government’s coronavirus-related economic relief measures. This CARES Act provides not only businesses but also individuals and hospitals with much-needed, emergency economic relief. The House of Representatives passed the CARES Act by a voice vote on March 27, 2020, and President Trump signed the bill into law later that day.

We will be posting more updates, analysis, and information, as it becomes available, about the CARES Act on our COVID-19 Emergency Resource Headquarters. Please check back frequency for updates. Gugliotta & Gugliotta, LPA is available to assist in interpreting the CARES Act for your business, and we are happy to help you find ways to claim and use available funding for your company.

The CARES Act 101

Below, find some of the most important aspects of the CARES Act:

1. The U.S. Government has created a $349 billion loan program for small businesses. This includes 501(c)(3) non-profits and physician practices. Importantly, these loans can be forgiven through various federal processes which act to ensure companies retain their employees during these uncertain times.

2. Individuals, businesses, and hospitals will receive stimulus to directly address the widespread economic havoc caused by the COVID-19 pandemic.

3. $500 billion in funds is allocated for assisting businesses, state governments, and local municipalities. Of that, no more than $46 billion is set aside to assist airlines, air cargo carriers, and businesses of paramount importance to the United States’ national security. This means that the remaining $454 billion is available to assist eligible companies, state governments, and local municipalities.

4. The Treasury Secretary now has authority to issue loans or make loan guarantees to state governments, local municipalities, and eligible businesses. Additionally, various regulations imposed in the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Economic Stabilization Act of 2008, and more have been relaxed.

5. $130 billion in funds has been set aside exclusively for the health care industry. This includes for assisting in the supply of drug and medical device shortages. additionally the CARES Act greatly expands the role of Telehealth services in Medicare, even if such services are unrelated to the COVID-19 pandemic.

6. The Federal government has expanded employment insurance eligibility, providing eligible individuals with an additional $600 per week on top of the individual’s state-determined unemployment amount.

7. Checks of $1,200 will be sent to Americans making no more than $75,000. In the case of joint returns, checks will be sent to joint filers making $150,000 or less, and heads of households making $112,500 or less. Additionally, payments of $500 per “child” will be paid “as rapidly as possible.”

8. The CARES Act expands the Defense Production Act, which now allows for a two year window for government to correct shortfalls in resources, without regard to the expense limit of $50 million.

A Quick Summary of the CARES Act

Division A — Keeping American Workers Paid and Employed, Healthcare System Enhancements, and Economic Stabilization

Title I — Keeping American Workers Paid and Employed Act

Paycheck Protection Program.

• $349 billion is set aside to cover a period from 2/15/2020—6/30/2020 and greatly expands the SBA loan eligibility requirements. This loan program now allows businesses which have suffered as a result of the COVID-19 pandemic to borrow money for a variety of eligible costs related to maintaining employment and benefits. These include payrolls cost, continuance of health care benefits for employees, employee salaries for employees making under $100,000 per year, mortgage interest and rent obligations, utility payments, and interest on debt which was incurred prior to the covered period.

• Moreover, this greatly expands the number of businesses (including non-profits) which are eligible for SBA loans, and it raises the maximum amount for all loans by 2.5 times the average total monthly payroll cost, or up to $10 million. The interest rates on these loans will be set at 0.5%.

• Eligible companies include those that employ 500 people or fewer. However, companies with a larger workforce may be eligible as well, depending upon industry-standard workforce sizes. Certain companies in the Accommodation and Food Services Industry (NAICS Code 72) may also be eligible, if they employ no more than 500 employees per physical location. Generally, the number of employees includes all affiliate firms.

• The affiliation rules of 13 C.F.R. §121.103 are waived for any Accommodation and Food Services Industry employer with fewer than 500 employees, certain franchise businesses, as well as small businesses which receive SBICA financing. When determining eligibility for these loans, affiliation rules otherwise apply.

• Waives the requires of other available credit, personal guaranty, and collateral.

• Lenders must determine whether a business was operational on February 15, 2020 and had employees for whom the company paid both payroll taxes and salaries, or paid independent contractors.

• Importantly, all or a portion of the loans may be forgivable, and debt service payments can be defers for 1 year.

Entrepreneurial Development

• The CARES Act provides funding in order to educate both small businesses and their employees about the federal resources that are available during this tumultuous period of time, the hazards of the COVID-19 illness, as well as best practices for working remotely.

State Trade Expansion Program

• Federal grants are now available to support State Trade Extension Program (STEP) in Fiscal Years 2018 and 2019 to remain available for use through the end of Fiscal Year 2021.

Waiver of Matching Funds Requirement under the Women’s Business Center Program

• The non-federal match requirement for Women’s Business Centers has been suspended for a 3 month window.

Loan Forgiveness

• For many, this is a big aspect

• Borrowers under the Paycheck Protection Program are eligible for loan forgiveness equal to the amount spent by the borrow during an 8-week period after the origination date on the following types of expenses only: (1) rent; (2) payroll costs for workers making less than $100,000 annually; (3) utility payments; and, (4) interest on a mortgage. Keep in mind that the amount forgive cannot exceed the principal amount of the loan.

• Employers participating in this program are incentivized to retain their employees, since the amount of the loan which can be forgive is proportional to any reduction in employees retained compared to the previous year.

• In an effort to encourage employers to re-hire any employees who may have already been laid off because of the pandemic, borrowers of this program who re-hire workers who they previously laid off will not be penalized for having a reduced payrolls at the beginning of the period.

Minority Business Development Agency

• The Department of Commerce, via the Minority Business Development Agency, is empowered to issue grants to minority business centers and minority chambers of commerce in order to better provide education, training, and advisement related to the availability and process of obtaining federal resources.

United States Treasury Program Management Authority

• The U.S. Treasury, in consultation with the SBA and the Farm Credit Association Chairman, will establish a criteria in order to let other lenders participate in the Paycheck Protection Program. However, participation in the program as a lender cannot threatened the safety and soundness of the lender, as relevant federal banking agencies may determine in consultation.

Emergency Economic Injury Disaster Loans (otherwise called “EIDLs”)

• The covered period begins on January 21, 2020 and ends December 31, 2020.

• During the covered period, EIDL eligibility has been expanded to include any business with less than 501 employees which operates as a sole proprietorship or an independent contractor, as well as any cooperative, ESOP, and tribal small business concern with fewer than 501 employees. Again, the number of employees is determined in a pool with all affiliates.

• EIDLs can be approved exclusively on the bases of: (1) Applicant’s credit score; (2) by use of alternate methods to determine the applicant’s ability to repay the loan.

• Applicants can request up to $10,000 advanced within 3 days after the Administrator received the application, subject to certain verification that the applicant is indeed eligible for this program. This advanced amount can be used for any allowable purposes listed in §7(b)(1) of the Small Business Act, and is not subject to repayment (even if the loan request is ultimately denied!).

• Waives the following requirements: (1) personal guarantees for loans up to $200,000; (2) credit available elsewhere test; and, (3) that the applicant have been operational for at least a year (however, the applicant must have been operational on January 31, 2020).

Subsidy for Certain Loan Payments

• For loans under Small Business Act §7(a), Small Business Investment Act Title V, and for loans made by an intermediary §7(m) loans or grants, the Administrator will pay the principal, interest, and fees owed for loans in regular servicing status for any such loans, whether on deferment or not, which were made before the CARE Act was enacted and the following 6-month period, as well as for any such loans that were made between March 27, 2020 and September 27, 2020.

• However, this doesn’t apply to Payroll Protection loans or EIDL loans which have separate subsidy and repayment requirements.

• Payments cannot be made more than 30 days from when the first payment is due, and will be applied in a way that the borrower is relieve of any obligation to pay that amount. The Administration will coordinate with relevant banking agencies in an effort to request that lenders not be subject to requirements to increase reserves on the basis of such payments.

• The Administrator will waive limits on the maximum loan maturities for loans given deferral and extended maturity during the 1-year period from March 27, 2020–March 27, 2021. The Administrator will extend lender site visit requirement timelines to whatever the pandemic situation requires, to within 60 days of a non-default adverse event, and 90 days of a default.

Bankruptcy

• Title 11, §1182(1) is amended in such a way that “debtor” is defined as people engaged in commercial or business activities and their affiliates (however, this does not include anyone who primarily owns single asset real estate) that have aggregate, contingent, liquidated secured and unsecured debts (which exist at the date of petition file or the order for relief) of $7.5 million or less (this doesn’t include debts owed to affiliates and insiders), half or more of which were derived from those activities.

• National Emergency Act payments for COVID-19 by the President are excluded from “current monthly income” and “disposable income” when weighing the courts’ power to approve debtor plans rejected by trustees or claim holders.

• Debtors who has experienced additional material financial hardship stemming directly from COVID-19

Title II

Subtitle B: Unemployment Insurance

Eligibility

• Expands the scope of people who are eligible for unemployment insurance to include those furloughed or unemployed as a direct result of COVID-19, self-employed or gig workers, and those who have already exhausted their preexisting state and federal unemployment benefits.

  • Only people expressly excluded from eligibility are those that can telework with pay, and those who receive paid sick leave or other paid benefits (even if they would otherwise satisfy all eligibility requirements under this new law)

Administration of Benefits

• Benefits will be administered by each state, and are contingent upon the State’s written agreement with the Labor Secretary to provide these specific benefits. States that do enter into this agreement will be reimbursed in whole or in part for the cost of the benefits, plus all administrative expenses.

Types of Benefits 

• An extra $600 per week, in addition to the amount customarily available for unemployment under state law, will be available. This apply to unemployment payments from from March 27, 2020 through July 31, 2020.

• States can agree to provide COVID-19 emergency unemployment compensation to individuals who have either exhausted all of their preexisting available benefits , or to those who are otherwise not eligible for benefits under existing state and federal law. Individuals must be able and available to work and actively seek work, unless they cannot due to COVID0-19 illness, quarantine, or movement restriction.

• States can opt to waive the waiting period for benefits, so individuals do not see a gap in their income.

• Federal government to temporarily fund short-time compensation under states’ existing plans. States that do not have short-time compensation plans yet may agree to implement such a plan, provided that employers who enter into short-time compensation plans must be required to pay half of the short-time compensation under the plan to the respective state.

Time Period for the Expanded Benefits

• These expanded unemployment insurance benefits will be available to covered individuals from January 27, 2020 through December 31, 2020, including any waiting periods under applicable state laws.

• Generally, the total benefit cannot expend beyond 39 weeks (this includes unemployment benefits for extended benefits received under existing state or federal laws)

• The additional $600 per week benefit will be available through July 30, 2020.

Protections Against Fraud and Overpayment

• If a person commits fraud or misrepresentation in an effort to obtain payments to which that person is not eligible, this will result in ineligibility for any other unemployment compensation benefits under the new law, in addition to criminal prosecution. 

• Overpayments may be accounted for by state agencies.

Treatment of Social Security

• Additional unemployment benefits provided will not be considered “income” for the purposes of Medicaid and CHIP

Subtitle B: Rebates and Misc. Individual Provisions

Tax Credits

• Eligible Individual taxpayers can benefit from tax credits equal to the sum of $1,200 for single filers or $2,400 for joint filers. Additionally, eligible individual taxpayers will received $500 per qualifying child. 

• These tax credits will be decreased  by 5% of the amount by which the eligible taxpayer’s adjusted gross income exceeds $150,000 for joint-filers and $112,500 for heads of household, and $75,000 for all other types of filers.

• For example, this tax credit will be entirely unavailable for joint filers earning $198,000 who have no children. 

Tax Treatments of “Coronavirus-Related Distributions”

• The CARES Act generally defines a “coronavirus-related distribution” as any distributed from an eligible retirement savings plan made in the year 2020, to an individual who is diagnosed with COVID-19, to an individual whose spouse or dependent is diagnosed with COVID-19, or to an individual who experiences financial hardships as a result of being quarantined, furloughed, laid off, saw a reduction in hours, or any other factor determined by the Secretary of the Treasury during the COVID-19 pandemic. 

• Qualified employer retirement savings plans can allow individuals who elect to receive a “coronavirus-related distribution”, which will not be subject to traditional 10% tax penalty imposed under the tax laws for early withdrawals.

  • Unless the aggregate amount of these distributions from all plans maintained by the employer (and any member of any “controlled group” which includes the employer” to such an individual is greater than $100,000

• Coronavirus-related distributions made from both eligible employer sponsored retirement savings plans and IRAs are exempt from the 10% early distribution penalty tax

• These distributions are, however, subject to regular income tax, although the individual can choose to spread these tax payments out over the course of 3 years.

Repayments of Coronavirus-related distributions 

• Any person who receives a coronavirus-related distribution can, generally speaking and at any time within 3 years after the distribution was received, make 1 or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement savings plan. These repayments will, to the extent of the amount of the contribution, be treated as having received the coronavirus-related distribution in an eligible rollover distribution, and will be treated as having transfers the amount to the eligible retirement account in a direct trustee to trustee transfer within 60 days of the distribution.

Effects one the Limits on Loans from Qualified Employer Plans

• The limitation on loans from any qualified employer plan made to qualified individuals during the 180 day period beginning on March 27, 2020 will be increased from $50,000 to $100,000. Additionally, if the due date of any loan occurs between March 27, 2020 and December 31, 2020, the due date will be delayed for 1 full year.

Required Minimum Distribution Threshold

• Temporary waiver of the minimum distribution requirements for the following types of accounts: (1) most defined contribution plans (for example, 401(k) plans), (2) §457(b) deferred compensation plans that are maintained by an eligible employer, or (3) IRAs. This applies for all required minimum distributions that would have otherwise been required in 2020.

Tax Treatment for Charitable Donations

• Allow taxpayers to take above-line tax deductions for charitable contributions of up to $300 for the 2020 tax year.

• Plus, except for certain exclusions, the percentage and surplus carryover restrictions on charitable and other qualified contributions are ignored

Subtitle C: Business Provisions

Employee Retention Credit for Employer Subject to Closure Due to COVID-19

• Eligible employers receive a credit on applicable employment taxes for each calendar quarter, in an amount of 50% of each employee’s qualified wages. The amount of qualified wages taken into account for each eligible employee cannot exceed $10,000 per calendar quarter. Further, this tax credit cannot exceed the applicable employment taxes owed by the employer for that calendar quarter. This credit will not be applicable when the employer is taking advantage of a small business interruption loan.

• An “eligible employer” is defined as any employer who (1) was operating during calendar year 2020, and (2) with respect to any calendar quarter for the operation was fully or partially suspended due to government order resulting from COVID-19, or the calendar quarter is within the period beginning on the calendar quarter after December 31, 2019 for which gross receipts for the calendar quarter are less than 50% of the gross receipts for the same 

Delaying Payment of Employer Payroll Tax

• Allow most employers to defer paying employment tax share from March 27, 2020 through December 31, 2020. Half of this amount will be due on December 31, 2021, and the other half will be due by December 31, 2022.

Modifications to Net Operating Losses (otherwise known as “NOL”)

• Generally, there is not a temporary repeal of taxable income limitation. This includes in the case of a taxable year beginning before January 1, 2021, the aggregate of the NOL carryovers to such year, plus the NOL carry backs to such year. This also includes in the case of a taxable year beginning after December 31, 2020, the sum of the aggregate amount of NOLs arising in taxable years beginning before January 1, 2018 carried to such taxable year, plus the lesser of the aggregate amount of NOLs beginning after December 31, 2017, carried to such taxable year, or 80% of the excess of certain taxable income. 

• For cases where the NOL arises in a taxable year beginning after December 31, 2017 and before January 1, 2021, the NOL will be a net operating loss carry back to each of the 5 taxable years preceding the taxable year of such loss, and certain rules which apply specifically to “real estate investment trusts” and life insurance companies.

Changes to Limitation on Losses for Non-Corporate Taxpayers

• For any taxpayer which is not a corporation:

  • For a taxable year beginning after December 31, 2017 and before January 1, 2026, subsection (j), which related to a limitation on excess farm losses for certain taxpayers, does not apply, and

  • For any taxable year beginning after December 31, 2020 and before January 1, 2026, any excess business loss of the taxpayer for the taxable year will not be allowed.

• With respect to the treatment of capital gains and losses and how to treat them when calculating “excess business losses:

  • Deductions for losses from the sales out exchanges of capital assets will not be considered

  • The amount of gains from sales or exchanges of capital assets taken into account cannot be larger than the smaller of: (1) the capital gain net income, determined by taking into account only gains and losses attributable to a trade or business, or (2) the capital gain net income.

• These amendments apply to taxable years beginning after December 31, 2017.

Changes to Corporations’ Credit for Prior Year Minimum Tax Liability

• For background, the corporate alternative minimum tax (“AMT”) was repealed as part of the Tax Cuts and Jobs Act. However, corporate AMT credits were made available as refundable credits over several years ending in 2021.

• This new law accelerates the ability of companies to recover those AMT credits, permitting companies to claim a refund now and obtain additional cash flow during the COVID-19 pandemic.

Changes to Limitation on Business Interest

• Temporary increase in the amount of interest expense businesses can deduct on their tax returns. Increase the 30% limitation to 50% of taxable income (with adjustments) for 2019 and 2020. As businesses look to survive the current crisis, this can allow them to increase liquidity while reducing cost of capital, in order for them to continue operations and keep employees employed and on payroll.

Qualified Improvement Property

• Allows businesses (especially in hospitality industry) to immediate write off costs associated with improving facilities, rather than having to depreciate those improvements over the 29-year life of a building. 

• This increases companies’ access to cash flow by allowing them to amend a prior year’s return, and also incentivized them to invest in improvements to help the country recover from the current crisis.

Temporary Exception from Excise Tax for Alcohol Used to Product Hand Sanitizer

• For all distilled spirits removed after 12/31/2019 and before 1/1/2021, these spirits will be tax-free for use in or contained in hand sanitizer produced and distributed in a manner consistent with FDA guidelines related to the COVID-19 outbreak.

We are excited to announce that Gugliotta & Gugliotta, LPA is now offering a comprehensive suite of services to help you ensure that your trademarks and brand names stay protected! With these annual services, you can effectively police your trademark.

Unfortunately, if you fail to police instances of infringement on your trademark, or otherwise ignore uses that could deteriorate your brand’s strength, your trademark runs the risk of becoming generic. This would be a major blow, as it would allow any and all of your competitors to use the trademark freely. You don’t want that, and neither do we! With our new comprehensive trademark monitoring services, you can rest assured that nobody is using your trademark in a way that would damage your intellectual property.

Our most comprehensive offering is our Annual U.S. Comprehensive Monitoring Subscription. This service will let you know if any similar trademark application have been approved by the USPTO and published in the Official Gazette. This will let you take proper action in order to defend your trademark by filing an appropriate Notice of Opposition. In addition, this service also searches for confusingly similar instances in top-level domains and general and even industry-specific common law resources, like databases, periodicals, trade journals, and more! This allows you to better monitor instances of competitors who may be infringing on your trademarks. From there, you can take appropriate measures to stop them from infringing on your valuable brand identity. This service provides our clients the peace of mind in knowing that they won’t lose their trademark rights due to lackadaisical policing and negligence. For an annual subscription of US$3,000.00 (with no obligation for more than a single year!), our licensed trademark attorneys will deliver to you frequent reports of any and all instances of the above red flags, thereby allowing you to ensure competitors aren’t damaging your brand, or worse—stealing your customers!

In addition, we are thrilled to announce our new lower-cost Annual U.S. Federal Monitoring Subscription. This new service will let you know as soon as any similar trademark applications have been published in the USPTO Official Gazette, so that you are alerted to them and can take swift action to oppose. We understand that not every brand name is equally as important or equally as prone to infringement (at least initially), and that our Annual U.S. Comprehensive Monitoring Service may be overkill for some of our clients and some of their brands. However, we don’t think that means those clients should be left out to dry with no easy method of monitoring significant threats to their intellectual property rights! That’s why we have worked very hard to bring you our new Annual U.S. Federal Monitoring service for an annual subscription of just USD$500.00 with no obligation for more than a single year. We think that this is an exceptional value for an essential trademark service that all trademark owners should consider.

If you are interested in purchasing either our Annual U.S. Comprehensive Monitoring Subscription or our Annual U.S. Federal Monitoring Subscription, please reach out to us by phone at 330-331-9455 or by email at trademarks@inventorshelp.com. Alternatively, we have launched a revamped website to allow you to e-commerce order select legal services directly from our website. Get in touch with one of our licensed trademark attorneys today to discuss all of your trademark needs!

Gugliotta & Gugliotta, LPA publishes this blog for educational and/or promotional purposes only, not to provide specific legal advice. By using this blog site, you indicate that you understand there is no attorney-client relationship between you and Gugliotta & Gugliotta, LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Gugliotta & Gugliotta, LPA, nor any of our clients.

We are excited to announce that we are now offering a comprehensive suite of trademark clearance searches, to ensure that there are no major hurdles that would jeopardize your trademark application.

Previously, we would provide complementary, preliminary, and informal federal trademark searches to our clients. This gave our clients a brief idea of what the landscape looked like before filing while understanding the financial restrictions that many of our clients — mostly entrepreneurs and small business owner. Now, however, we are happy to offer more comprehensive options to give our clients a much more thorough understanding of the strengths and weaknesses of their proposed brand names. For this reason, we strongly recommend that our clients—both new and existing—have at least one of these services performed for every trademark that they are interested. Simply put, the risks are too high for a small business owner to invest in a brand identity before fully realizing this critical information.

By performing one of these recommended trademark searches, our clients will be able to better understand the landscape and go into the trademark application process with the weapon of knowing what else is out there. With these services, we can better serve our clients by determining whether a proposed brand name could end up being rejected on the substantive ground that another confusingly-similar mark exists.

If you order our new U.S. Comprehensive Search, we will let you know within four (4) business days whether or not there are confusingly similar marks already filed in the U.S., whether with the USPTO or on one of 51 state trademark registries. Additionally, our U.S. Comprehensive Search will uncover common-law uses of similar marks that don’t have any trademark filings associated with them, but which could nonetheless prove a substantial risk. We are happy to announce that we will be offering this thorough and comprehensive search report, powered by industry-leading Corsearch trademark searching software, for a flat fee rate of USD$1,500.00.

If you order our new U.S. Federal Clearance Search, we will provide you next-day insight as to identical and similar marks filed federally in the U.S. While this service is less comprehensive than our U.S. Comprehensive Search, it offers same-day turnaround and the confidence to know whether or not any confusingly similar trademarks are currently filed with the USPTO. With this knowledge, we will put together a written recommendation for you as to whether or not your proposed brand name is worth pursuing, or whether you should consider re-branding. We are happy to announce that this budget-friendly service, powered but professional grade TrademarkNow trademark searching software, is available for a flat fee rate of just USD$750.00.

If you are interested in purchasing either our Annual U.S. Comprehensive Monitoring Subscription or our Annual U.S. Federal Monitoring Subscription, please reach out to us by phone at 330-331-9455 or by email at trademarks@inventorshelp.com. Alternatively, we have launched a revamped website to allow you to e-commerce order select legal services directly from our website. Get in touch with one of our licensed trademark attorneys today to discuss all of your trademark needs!

Gugliotta & Gugliotta, LPA publishes this blog for educational and/or promotional purposes only, not to provide specific legal advice. By using this blog site, you indicate that you understand there is no attorney-client relationship between you and Gugliotta & Gugliotta, LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Gugliotta & Gugliotta, LPA, nor any of our clients

Is it really possible for somebody to trademark a basic article, such as “a”, “an”, “the”, or “or”? We’re about to find out!

The Ohio State University recently filed a trademark application for the basic English article “THE” in association with “Clothing, namely, t-shirts, baseball caps and hats.”

University spokesman Chris Davey confirmed the public record by admitting that the university had filed the trademark application, serial number 88571984, claiming such a filing is necessary to protect the University’s brand.

"Like other institutions, Ohio State works to vigorously protect the university's brand and trademarks," Davey told The Columbus Dispatch in a statement. "These assets hold significant value, which benefits our students and faculty and the broader community by supporting our core academic mission of teaching and research."

It usually takes about 3–5 months after filing for a trademark application to even be looked at by an examining attorney. We will find out then whether or not Ohio State can prove that “THE” has come to acquire secondary meaning, allowing it to act as a source identifier.

The United States Patent and Trademark Office (“USPTO”) has proposed a new rule that would require foreign trademark registrants and applicants to be represented by a licensed U.S. attorney in order to file trademark documents with the USPTO. This rule was entered into the public comment period last November, a process that effectively puts the public on notice and allows members of the public to submit their feedback on the proposed rule change. This public comment period expires in February, with a final action to approve the rule change expected to take place in June, 2019. If approved, this new rule would become effective July, 2019. 

There are a couple of reasons behind this drastic change in policy for a Trademark Office that has traditionally allowed applicants and registrant to represent themselves pro se — one such reason is broader, and the other to combat a specific problem that has been plaguing the USPTO in recent times. 

Broadly, the USPTO states that this rule change has the purpose of ensuring that the USPTO can “effectively use available mechanisms to enforce foreign applicant compliance with statutory and regulatory requirements in trademark matters; provide greater confidence to foreign applicants and the public that registrations that issue to foreign applicants are not subject to invalidation for reasons such as improper signatures and use claims; and aid USPTO efforts to improve accuracy of the U.S. Trademark Register.”While it appears that this rule exists as a direct result of the recent influx of pro se applications filed by Citizen citizens, let’s tackle each of these listed reasons in turn. 

The autocratic Chinese government has been effectively subsidizing Chinese citizens’ efforts to obtain U.S. Trademarks registrations. Indeed, the Chinese regime will pay $790 to any Chinese citizen who successfully obtains a federal U.S. trademark registration. This has had the effect — whether intended or not — of encouraging Chinese citizens to obtain trademark registration in the U.S. by any means necessary, even if they do not sincerely have any interest in those trademark rights. While this may seem targeted directly at reducing fraudulent Chinese applications, this rule is actually in line with similar rules long in effect in Canada, Japan, and China. In the European Union, applicants may apply pro se, but must appoint a representative before or after receiving an Office action. 

The idea is not, necessarily, that a private U.S. attorney is more capable of spotting a fraudulent trademark application than an examining attorney at the USPTO. Indeed, the examining attorneys are quite adept at weeding out real from manufactured motives behind a given trademark application. Instead, this rule is seemingly aimed at increasing the judicial economy of the USPTO by decreasing the number of fraudulent applicants. If a Chinese citizen must pay to be represented by a licensed U.S. attorney, surely it would significantly impact the amount of the $790 subsidy they are looking to reap. Thus, the hope is that this added expense will make the process too expensive and cumbersome for all but the most sincere foreign applicants. Unless the applicant has a sincere interest in protecting his or her trademark rights in America, the process will be prohibitively not worth it, despite the government subsidy. 

The other major purpose behind this rule change is to help sincere applicants receive the best possible outcome at the USPTO. Indeed, a 2013 Sanford University study found that Applications filed pro se run a significantly high risk of being rejected than those represented by a licensed attorney. Pro se applicants, who don’t necessarily understand the nuances of trademark law, are susceptible to innocent yet damaging mistakes — for example, listing a far too broad laundry list of goods that they do not reasonably expect to participate in, thus opening any eventual registration up to challenges. 

There is still time before this rule goes into effect. However, if you have any questions about hiring experienced and licensed U.S. trademark attorneys to represent you in front of the USPTO, we would be happy to discuss with you further! Please contact Gugliotta & Gugliotta, L.P.A. here, by phone at (888) 298-8580, by email at trademarks@inventorshelp.com, or by mail at 55 S. Miller Road | Ste. 203, Akron, OH 44286.

Gugliotta & Gugliotta, LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Gugliotta & Gugliotta, LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Gugliotta & Gugliotta, LPA or any of our clients.

"When the Copyright Act was amended in 1976, the words "tweet," "viral," and "embed" invoked thoughts of a bird, a disease, and a reporter," Judge Katherine B. Forrest noted before breaking with past precedent and holding media companies liable for copyright infringement for linking to a tweet containing a copyrighted photograph. 

Photographer Justin Goldman took a photograph of New England Patriots' superstar quarterback Tom Brady heading to a meeting to recruit NBA Superstar Kevin Durant to the Boston Celtics. Goldman then posted it on his personal Snapchat. From there, users posted that same photograph on Twitter. From there, various websites — Time, Yahoo, several Vox Media websites, the Boston Globe, Gannet, and Breitbart — embedded that tweet into their articles. Even though Twitter was the company hosting the image on their servers, Goldman sued those online publications for copyright infringement, since the articles featured the tweet and showed the picture in-line. Indeed, those media companies argued that they did not host the image on their own servers — they merely asked Twitter to have the image appear. 

In past precedent, media companies relied on the so-called "server rule," which meant that web publishers were free to link to full-sized images protected by copyright, so long as the images are stored on another company's servers. This rule has existed for approximately a decade and was the backbone for the increasingly popular practice of media companies embedding links within their articles. 

judge Forrest, however, is seemingly not a fan of the current interpretation of the "server test." She held that a distinction exists between a search engine — think Google or Duck Duck Go — and a news site. In Judge Forrest's view, the user of a search engine is an active participant in searching for an image, while a viewer of the news site is more passive and merely receives pre-arranged content. Indeed, she noted that "Google ... provide[s] a service whereby the user navigate[s] from webpage to webpage," while a blog has full-color images awaiting the user regardless of whether the user is searching for that particular content. This, Judge Forrest believes, violated Goldman's exclusive right to display his copyrighted work.

Through this new interpretation, Judge Forrest held that the media companies in question were liable to Goldman for copyright infringement. What this means is that photographers may now have a stronger legal case against websites that embed their copyrighted works into articles without permission.  That is, assuming this ruling isn't overturned on appeal.

If you are an author or artist in need of help obtaining a federal copyright registration or enforcing your copyrights, you can contact the professional attorneys at Law Offices of John D. Gugliotta, P.E., Esq., LPA. Our registered attorneys can help you secure federal copyright registration! Contact us today here, or call us at (888) 298-8580.

The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.

Let’s pretend for a little bit. C’mon, bear with me here. Imagine that you — yes, you! — are an aspiring artist. Maybe you craft in wood. Maybe you write novels or poems. Perhaps you take stunning photographs. If you want to spice things up, imagine that you are a high-energy drummer in an up and coming rock band. One day, as you walk down the street, you see your photos or an excerpt from your book, or hear your latest single — whatever — in a storefront. It could be exciting, right? “Hey! I’m finally making it!” But what if you never sold your work to that store owner, or anybody else, in the first place? If you’re not making money off your art… who is?

In theory, hypothetical-you could sue the store owner for copyright infringement. And yet… if independent creators are, as the stereotype goes, truly “starving artists,” then the soaring costs of litigation will almost certainly act as a nuclear-level deterrent, ensuring that independent artists and creators who victims of piracy remain victims of piracy. This has the consequence of making it effectively impossible for authors, writers, and artists to protect their livelihoods. In turn, this may dissuade the most creative among us from pursuing their vision.

In a 2015 survey, The American Intellectual Property Association found that, on average, the cost of a single copyright litigation case with less than one million dollars in damages was $270,000. It’s hard to imagine any but the most successful artists having the kind of financing available for even small-claims copyright infringement litigation.

Congress, in a surprising move, has decided to take note and actually do something about it. House Resolution 3945 — the Copyright Alternative in Small-Claims Enforcement Act of 2017 (CASE Act, for short) — seeks to provide a cost-efficient avenue for independent and up-and-coming artists to protect their creations from infringement.

The CASE Act, if made into law, would establish a series of tribunals — called the Copyright Claims Board or “CCB” for short — made up of experts in copyright law. These expert judges would review infringement claims without incurring the astronomical costs of full-on copyright litigation.

There are three major aspect of note with regard to the CCB: (1) issues of jurisdiction and due process; (2) the limitation of damages; and, (3) the existence of an opt-out system.

Jurisdiction and Due Process

Critics of the bill complain that the CCB circumvents due process by allowing an alternative to the federal courts — which currently have exclusive jurisdiction over copyright infringement claims. Indeed, the CCB would be a subsidiary of the Copyright Office, completely independent from the judiciary. Further, the judges would be appointed by the Librarian of Congress, and could not be removed based on the “substantive result of any individual determined reached by the” CCB. Federal courts would still not have jurisdiction on appeal, either; instead, decisions of the CCB could only be appealed to the Register of Copyrights. Only in instances of “fraud, corruption, misrepresentation, or other misconduct”, or when a party failed to appear with an excusable reason, or when the CCB has “exceeded its authority” could the decision of the tribunal be removed to federal court. Importantly, removal to federal court is not available when the CCB errs in interpreting the law.

However, the CASE Act seeks to remedy this, built-in, by requiring both the plaintiff and the defendants to consent to the CCB’s jurisdiction. Thus, if one is a defendant in a copyright infringement case they must agree to the tribunal system for it to have jurisdiction; if the defendant does not consent to its jurisdiction, then federal district courts retain their jurisdiction over the claim. It should also be taken into account, however, that, from a practical standpoint, the astronomical expenses of copyright litigation act as a sort of de facto hurdle in preventing due process.

Limitation of Damages

Under the CASE Act, the CCB’s jurisdiction is limited to cases in which damages up to $30,000 are in play. In other words, the CCB could only award a copyright holder up to $30,000.00 — any claim for a larger amount would still be within the federal circuit’s sole jurisdiction. Small claims courts are not a new idea; indeed, small claims divisions exist in the judicial branch of all 50 states. On average, these small claims divisions have a limitation of damages of approximately $6,000.

The CCB, on the other hand, could levy damages five times more than the average small claims court. This is, in part, because the CCB would not be limited to providing so-called “actual damages,” but could also assign statutory damages under 17 U.S.C. § 504. Statutory damages are available in certain circumstances to punish infringers even when the copyright in question is not wildly profitable.

Thus, the CCB is ultimately limited to awarding $15,00 in damages per infringement, with up to $30,000 in damages total. The bill’s critics take issue with the fact that the CCB’s damage limitation is more than double of the damages available in the small claims courts of 49 states. However, these critics seemingly ignore the reality that copyright infringement may not result in much actual damage, especially for smaller artists, and that statutory damages are available in copyright cases for the deterrence effect. Further, critics seemingly ignore that the $30,000.00 limit on damages — even statutory damages — is far less than the $150,000.00 in statutory damages available under Title 17 of the United States code for willful infringement.

The Opt-Out System

As mentioned above, the CCB would be an “opt-out” tribunal. This means that, upon being served a notice of the suit, a Defendant will have the opportunity to deny the CCB’s jurisdiction, instead having the federal circuit determine the case. However, a defendant who fails to respond will automatically be subjected to the CCB’s jurisdiction. This could pose problems by creating what could be a “default judgement farm system,” so to speak. If copyright holders know that defendants are not likely to appear, they may be inclined to “farm” complaints against defendants in front of the CCB and then achieve a default judgment — all outside of the scope of the judicial process and, indeed, circumventing the judicial process as we have known it.

Conclusion

It may be that the CASE Act is fundamentally flawed and not the proper answer to the very real issues of a de facto lack of availability for independent copyright holders to enforce their copyrights. However, it is interesting legislation which highlights areas in which enforcing one’s copyright is fundamentally broken in 2018. Clearly, something — whether it be the CASE Act or a derivative of the CASE Act — should change to provide for easier access to small claims copyright enforcement legislation.

If you are an author or artist in need of help obtaining a federal copyright registration or enforcing your copyrights, you can contact the professional attorneys at Law Offices of John D. Gugliotta, P.E., Esq., LPA. Our registered attorneys can help you secure federal copyright registration! Contact us today here, or call us at (888) 298-8580.

The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.

Redbox, the popular movie-rental terminals outside of your local grocery store, has begun reselling download codes for popular movies, including Disney’s Beauty and the Beast, Frozen, and its three newest Star Wars films.

You know the ones. When you buy a Blu-ray or DVD (why are you still buying DVDs? It’s 2018!) from Disney, it comes bundled with a piece of paper inside, affixed with a special code allowing you to download a digital copy of that same movie on [Redeem Digital Movies] and [Movies Anywhere]. This allows you to watch the movie on your computer, phone, tablet, video game console, or TV-streaming-box.

Redbox has viewed these disc-and-code bundles as two separate products. Thus, Redbox purchased Disney Blu-Rays and DVDs, coupled with digital codes. from ordinary retail outlets. Redbox would then allow consumers to rent the physical media discs, as it always has. However, Redbox also began reselling the digital codes packaged in its purchases directly to consumers.

As you could probably imagine, Disney did not take too kindly to this, suing Redbox for copyright infringement — specifically for violating the licensing terms that accompany the purchase of these disc-and-code bundles dubbed “Combo Packs.” Disney argued that the physical disc and the digital code are not two separate products, but rather offered together as one product for customer convenience. Indeed, the products come affixed with the language “codes are not for sale or transfer.” Disney’s argument, essentially, was that Redbox had to agree to the terms of that condition in order to un-package the products and gain access to the digital code to begin with. A further claim Disney brought against Redbox was that Redbox is encouraging end-users to infringe on Disney copyrights, thus being liable under the doctrine of contributory infringement. Disney requires consumers “represent” that they own the physical disc that accompanied the download code in order to access the digital movie provided by the digital code.

Federal judge Dean Pregerson recently ruled against Disney in this case, rationalizing his decision with the somewhat obscure doctrine of Copyright Misuse. Copyright Misuse occurs when the copyright holder is abusing their copyright, and applies to prevent the copyright holder from enforcing the copyright. Judge Pregerson held that Disney’s tying of physical disc ownership and digital download codes was inconsistent with the copyright law’s First Sale Doctrine.

Judge Pregerson ruled that merely including the language “codes are not for sale or transfer” on the disc’s box didn’t create a binding contract. Other language included on Disney’s boxes stated that “this product cannot be resold or rented individually.” However, Judge Pregerson noted, correctly, that this is legally incorrect — the First Sale doctrine gives a customer the right to resell copyrighted matter that they legally purchases, regardless of whether the copyright owner wants them to or not.

With respect to Disney’s claims that Redbox was liable for contributory infringement, Judge Pregerson again noted that Disney was at fault for fundamentally tying physical media to digital download codes, holding that “Disney’s copyrights do not give it the power to prevent consumers from selling or otherwise transferring the Blu-ray discs or DVDs contained within Combo Packs.” In Judge Pregerson’s view, Disney’s requirement that owners of a physical disc are the only people that can use digital download codes also means that consumers can’t access the digital movie derived from that code unless they give away their right to resell the physical disc. The Judge held that this practice constitutes copyright misuse by Disney, viewing this behavior as a gambit by Disney to use its copyrights in order to restrict customers beyond what the copyright laws provide.

Disney is likely to appeal this ruling. It will be interesting to see whether this holding would survive an appeal. This is because, according to fans of resale rights, this ruling could have wide-spread, massive consequences. As such, the appellate court may be hesitant to uphold it. Indeed, this ruling would effectively create a ban on tying digital download codes to physical disc media, because movie studios may stop offering digital download codes entirely rather than have consumers able to resell the digital codes.

Interestingly, this doesn’t just affect the movie industry. Indeed, video games often include download codes with physical game discs (often for downloadable content known as DLC); Internet-of-Things devices, like those compatible with the Amazon owned Alexa voice assistant, tie copyrighted software to a physical device and sell both together. This ruling could effectively stop both practices, or otherwise cause copyright holders of the like to severely reanalyze their business methods.

Given the large stakes, and how fundamentally this ruling could change the copyright law, it will be interesting to see whether the appellate court ultimately decides to overturn this ruling, and instead prefer that Congress implement such changes, as it deems appropriate. Time will tell, but perhaps one day, years from now, copyright law professors will tell their students that “a long, long time ago… Star Wars helped to fundamentally change the way copyrights work.”

If you are an author or artist in need of help obtaining a federal copyright registration, you can contact the professional attorneys at Law Offices of John D. Gugliotta, P.E., Esq., LPA. Our registered attorneys can help you secure federal copyright registration! Contact us today here, or call us at (888) 298-8580.

The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.

With a unanimous vote of 94-0, the United States Senate voted on February 4, 2018 to confirm California intellectual property litigation attorney Andrei Iancu as the next director of the United States Patent and Trademark Office (USPTO). Mr. Iancu is currently a managing partner of Irell & Manella LLP’s Los Anegles office.

Mr. Iancu has a history with U.S. President Donald Trump. Indeed, Mr. Ianu’s firm once defended the President — prior to his term in office — as well as other parties including NBC Universal in a copyright infringement case regarding the hit TV show “The Apprentice,” which Mr. Trump starred in for many years. Notably, Mr. Iancu’s work led to settlements of more then $1.6 billion in payments to TiVo in patent infringement cases against EchoStar, AT&T, Verizon, Microsoft, Cisco,, and Motorola.

The USPTO has been without a director for almost one year, ever since former Director Michelle Lee left the position.

If you are an entrepreneur seeking to protect your intellectual property or otherwise grow your business, you can contact the professional attorneys at Law Offices of John D. Gugliotta, P.E., Esq., LPA. Our registered attorneys can help you secure intellectual property protection as well as help safeguard and grow your business! Contact us today here, or call us at (888) 298-8580.

The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.

In a bit of Amazon-centric news, yesterday, Tuesday February 27, 2018, Amazon purchased start-up doorbell maker Ring for an estimated $1 Billion. You read that right: $1,000,000,000.00.

While many of you likely make purchases from Amazon, this purchase dwarfs even your lifetime purchases from the e-commerce giant. In fact, it’s likely that this deal is Amazon’s second-largest acquisition ever, paled only by the $13.5 Billion the online retailer paid for Whole Foods just last year.

So what is “Ring”, anyway? Ring makes Internet-of-Things enabled doorbells. These doorbells not only interface with WiFi and voice assistants, but also come equipped with motion sensor and video cameras. With these features, Ring doorbells sends notifications to the user when somebody is at the door; it also enables users to talk directly to visitors without needing to be face-to-face — or even home at all! Users can keep tabs on movement outside their doors as well as tap into a live video stream at any time.

Obviously, Amazon is big into Internet-of-Things enabled devices, emphasized by their Alexa service and the voice assistant’s newest IoT-bridge enabled Echo Plus housing. With this purchase, expect Ring doorbells to integrate more tightly into the Alexa voice assistant service, perhaps eschewing rival Apple’s HomeKit framework altogether.

Amazon’s play here might not be getting into IoT-enabled device manufacturing, but rather a play into security and circumventing package theft. Package theft is not a new problem for Amazon, as the company has innovated in areas of package lockers and package hubs for apartment buildings, all in an effort to cut down on package theft. As recently as 2017, Amazon even introduced its own Cloud Cam security camera which, when coupled with a product called “Amazon Key,” allows delivery drivers to leave packages inside of customers’ homes when the customer is not even home!

There’s no doubt that Amazon will make millions from selling Ring doorbells directly from consumers. However, the Billion-Dollar price tag may suggest that Amazon is looking to improve delivery reliability, and thus consumer satisfaction, by allowing for increased front-stoop security to eliminate package theft altogether. Time will tell whether Ring doorbells will be Amazon’snext best-seller. Nevertheless, perhaps the purchase is reasonable considering other services and features it could allow Amazon to provide.

If you are an Amazon seller in need of help obtaining a federal trademark registration, to ensure Amazon Brand Registry eligibility, you can contact the professional attorneys at Law Offices of John D. Gugliotta, P.E., Esq., LPA. Our registered trademark attorneys can help you secure the federal registration that you need to benefit from Amazon's Brand Registry! Contact us today here, or call us at (888) 298-8580.

The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.

You may see several indicators of trademarks in the wild. Either ™, ℠, or ®. ™ and ℠ indicate trademarks and service marks, respectively. These marks alert the public — and one’s competitors — of your trademark claim, regardless of any application or registration for federal trademark protection. The ® mark can only be used when the United States Patent and Trademark Office has granted you a federal trademark or service mark registration. However, achieving federal trademark registration is not the last step in fully protecting your brand. Indeed, you should apply for incontestable status when eligible.

Why Have a Federal Registration

There are common law trademark rights available to brand owners who don’t have a federal registration. Nonetheless, federal registration provide significant benefits that brand owners cannot find with a mere common law trademark.

Specifically, a federal registration gives a trademark much more strength and protection in the case of litigation, and provides that strength throughout the entire nation.

Even still, achieving a federal trademark registration is not the end all be all. Indeed, you must continue to use the trademark in commerce to retain the benefits of registration; you must police the trademark and ensure competitors don’t start using it; and you must file renewal paperwork with the USPTO every so often, to let the USPTO know that the trademark is still being used.

Incontestability

However, owners of federal trademark registration are not required to file for incontestable status. Even though it’s not a requirement, a trademark owner absolutely should file for this status when eligible. 15 U.S.C. § 1065 provides the ability to convert a registered trademark into an incontestable trademark. If a trademark owner files an affidavit or declaration stating that they have been using the trademark continuously for five years since the registration date, the trademark can become incontestable.

This affidavit must be filed within a year after the expiration of any five-year period of continuous use, after the registration/publication. In practical terms, this affidavit should be filed when the trademark owner filed for their first 5 year renewal.

There are some caveats to achieving incontestability status, however. For instance, the trademark owner must declare that no final decisions adverse to the trademark owner has been rendered, and that no such proceedings are pending in court or before the USPTO. See 37 C.F.R. 2.167(d)–(e).

So, what does this all mean? It means that it is impossible for the Trademark Trial and Appeal Board to cancel a trademark registration on the basis of descriptiveness.

However, this status does not prevent all potential challenges to a trademark’s registration. Indeed, the validity of even an incontestable trademark can be challenged and potentially invalidated on the basis that is is generic, abandoned, or that fraud was committed on the USPTO.

Nevertheless, incontestable status removes the major headaches from the trademark maintenance process. If an owner is vigilant and properly polices its mark, it can ensure that the mark doesn’t devolve into being generic, and continuous use ensures that the trademark will not go abandoned. Thus, so long as a trademark owner doesn’t commit fraud on the USPTO and properly polices its trademark, post-registration, it becomes much, much, much more difficult for an incontestable trademark to be invalidated or cancelled.

This is why it’s very important that trademark owners apply for incontestability when eligible. If you need help obtaining a federal trademark registration or incontestable status, you can contact the professional attorneys at Law Offices of John D. Gugliotta, P.E., Esq., LPA. Our trademark attorneys can help you secure the federal trademark registration and incontestable status. Contact us today here, or call us at (888) 298-8580.

*The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.

It’s a great time to be an Amazon executive and, more importantly, an Amazon seller. 

With its recent quarterly earnings report, Amazon is officially the third largest company in America, with a market valuation in excess of $685 billion. In comparison, only Apple — with a market valuable of $815 billion — and Google — with a market valuation of $750 billion — are larger American companies than the Washington-based marketplace giant. 

Still, Amazon’s growth has been far surpassing its two California-rivals. In the past year alone, Amazon’s stock price has increased by a staggering 21%. To put this in perspective, Apple is facing a year-on-year stock price decrease.

As if Jeff Bezos, Amazon’s CEO, doesn’t have enough to smile about with this news, he recently passed Bill Gates as the richest person in the entire world with a net worth of $116 billion.

Things were not always so rosy for the Washington tech giant. For years, Amazon has reported strong revenue numbers and yet barely managed to pull in a profit. The market was hesitant but patient about this strategy — fearing Amazon’s long-term viability but understanding the company’s vast potential. With this latest earnings report, there may not be any more concerns about the company, especially in its three most vulnerable areas: (1) Retail operating margins in North America; (2) Amazon Web Services; and (3) shipping costs.

With respect to the marketplace giant’s North American retail operating margin, these margins have reached $1.69 billion — more than doubling. This is thanks, in part, to the company’s acquisition of Whole Foods as well as the company’s investments in expanding its network of warehouses finally paying off.

Amazon Web Services is likely the company’s most important area of business and showed even more growth and profits. Throughout the past ten quarters, AWS’s growth had been slowing. Now, however, revenue growth for the division improved from 41.9% to 44.6%, also posting an operating profit growth at 46.2%.

Finally, the company is spending less and less on shipping costs. Despite offering free two-day shipping with its Amazon Prime service, the company has managed to make deals to keep its spending in this category high but reasonable. 

This is all great news for Amazon executives and Jeff Bezos, but it also means that it is a great time to be an Amazon seller. If you are an Amazon seller in need of help obtaining a federal trademark registration, to ensure Amazon Brand Registry eligibility, you can contact the professional attorneys at Law Offices of John D. Gugliotta, P.E., Esq., LPA. Our registered trademark attorneys can help you secure the federal registration that you need to benefit from Amazon's Brand Registry! Contact us today here, or call us at (888) 298-8580.

The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.

On Monday, Grumpy Cat Limited was awarded nearly one million dollars in damages for Grenade Beverage LLC’s copyright and trademark infringement via unauthorized use of the “Grumpy Cat” meme. But let’s rewind to get the whole picture, here.

Grumpy Cat is a popular meme, wherein the cat Tardar Sauce looks, well, grumpy. Take a look!

After the image of Tartar Sauce was posted online in 2012, it quickly went viral. This prompted invitations for Tartar Sauce to appear on a myriad of television shows — such as Today, Good Morning America, American Idol, and The Bachelorette) — as well as front page features in The Wall Street Journal and New York Magazine. Incredibly, Tartar Sauce even starred in her own Christmas movie, broadcast on Lifetime Television Channel. No, really! Check it out:

This widespread fame prompted Tartar Sauce’s owners to form Grump Car Limited, which then acquired copyright and trademark protection in Grumpy Cat’s name, image, and likeness. By leveraging this intellectual property, Grumpy Cat Limited reaped millions of dollars in sales from officially licensed products. In 2015, Grenade contracted with Grumpy Cat Limited to leverage the company’s “Grumpy Cat” copyrights and trademarks in the sale of ice coffees branded “Grumpy Cat Grumppuccino” in exchange for royalty payments.

However, Grenade had bigger ambitions and wanted to use the Grumpy Cat meme — protected by Grumpy Cat Limited’s trademarks and copyrights — in the sale of its roasted coffee beans and tee shirts. Grenade approached the proud cat owners with plans, but was rebuked by the company. Nevertheless, Grenade continued and, without authorization, began making and selling roasted coffee beans and tee shirts featuring the meme. Grenade advertised these unauthorized products heavily on social media and, to make matters worse, failed to pay Grumpy Cat Limited any royalties on these unauthorized sales.

Grenade countersued Grumpy Cat Limited for breach of contract, for failure to uphold its end of the licensing agreement by not properly advertise the authorized iced coffee product covered by the licensing agreement. Nevertheless, the jury must have been taken with the grumpy Tartar Sauce, because it awarded Grumpy Cat Limited $701,000.00 in damages stemming from Grenade’s copyright and trademark infringement.

That’s enough to, hopefully, make Tartar Sauce enjoy the joys of life.

The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.

Amazon Brand Registry is a fairly new program designed to protect an Amazon seller's brand. Brands are powerful tools, as they allow the customer to easily and quickly identify the source of the goods they buy. When a brand has a strong identity and a good reputation, consumers are more likely to continue buying from that brand — it is a safe space in an uncertain marketplace, and they know, more or less, what they are buying into. The new Amazon Brand Registry is important, but its specifics can be confusion. Therefore, it is important to understand the basics of both Amazon Brand Registry and the United States Trademark Act.

Brand Registry — What Is It?

The updated Amazon Brand Registry is designed to allow e-commerce sellers on Amazon to access exclusive and powerful tools. These tools range from predictive automation to text and image searching, and more. These tools aim to help sellers continue to drive traffic to their authorized Amazon listings. By using the Amazon Brand Registry, sellers can channel potential customers to their legitimate Amazon listings

Use Brand Registry to Protect Your Brand

Through Brand Registry, Amazon is aiming to address a persistent issues that sellers have been complaining about — namely, that other sellers infringe on one's legitimate trademark or other intellectual property rights. Copycat sellers have been a plague on the Amazon experience — cheap, low-quality goods trading on the good will of higher-qality products. This can result in confused consumers mistakenly purchasing the cheaper, copycat product only to be disappointed with the quality. This poor quality negatively affects the consumer's trust in the legitimate brand — through no fault of its own!

Further, "regular" Amazon sellers must adhere quite tightly to the company's algorithmic requirements. However, Brand Registry sellers have more freedom with respect to product titles, product details, product images, Amazon-issued product IDs. Further, Brand Registry sellers can reduce matching errors that may occur in the listing process. 

Who Qualifies For Amazon Brand Registry?

Sadly, the new Brand Registry program does not allow open admittance. Indeed, only sellers with a registered trademark for their brand are eligible for Amazon Brand Registry. Further, this federal registration must be for a Standard Character Mark or a Typeset Word(s)/Letter(s)/Number(s). Previously, Amazon only required that sellers prove that they owned a website domain name for the brand, that their product packaging included the brand name, and that the product was sold under that brand name. Now, however, sellers must show Amazon that they hold a registered trademark for their brand name, as well as be able to show images of the brand's logo, images of products/packaging with the trademark, a list of product categories under which the brand sells goods, and a list of countries where the brand's products are made and sold. 

In exchange for this, Amazon will work to protect established brands on its e-commerce marketplace. However, the seller must show Amazon that it is investing in its brand — specifically by registering their brand with the United States Patent and Trademark Office (USPTO).

Ultimately, Amazon Brand Registry is available to sellers with a federal trademark registration and who make their own products, who own private label brands, or who sell branded white-label products. Further, traditional manufacturers and authorized distributors can also qualify.

Were You a Brand Registry Enrollee prior to April 30, 2017?

If so, Amazon requires you to re-enroll in Amazon Brand Registry, provided that you meet all of the eligibility requirements. So, even if you were a Brand Registry member prior to these new requirements, you must still take action to register your trademark and then re-enroll in Brand Registry.

So… What Is a Trademark, Anyway?

A trademark is any image, mark, stylized words or text, catch phrase, logo, company name, product name, etc., which is used in commerce and associated with a good or service. Certainly, trademarks can be registered with either state or federal agencies. However, Amazon Brand Registry required federal registration with the USPTO. Importantly, anybody in the world can file a USPTO trademark application — there is no United States citizenry requirement.

After filing the application with the USPTO, the application goes through a rigorous examination process. During this, a USPTO employee weighs the merits of the mark's registration, considering whether the mark is distinctive enough to be entitled to trademark protection and whether or not another registration for the same, or a confusingly similar, mark exists in a similar category of goods or services. 

A trademark application can be as broad or as narrow as the applicant wants. For example, if the applicant only uses the trademark in association with the sale of workout equipment, the applicant can file an application with just one classification. However, if the applicant uses or intends to use the trademark in association with work out equipment, clothing, and cell phone cases, multiple classifications can be filed. An experienced trademark attorney can be invaluable in helping an applicant determine the areas, or classifications, of commerce that a trademark application needs. 

If the mark is eligible for trademark protection, it will be published for opposition. If no members of the public challenge the registration within a set period of time, the applicant is issued a trademark with the registration number. While this sounds fairly straight forward, the process can sometimes become very complicated very quickly. If the USPTO denies the application, the applicant will have to either challenge the refusal or abandon the idea of a federal registration altogether. An experienced attorney can help with this process and can zealously defend your mark in the face of any such refusal.

What Does Trademark Registration Get You?

Trademark registration is an incredibly powerful tool for brands. For example, federal trademark registration with the USPTO bestows the following rights and powers onto the trademark holder:

1. Federal registration provides exclusive intellectual property rights, ensuring that nobody but the trademark holder — or those authorized by the trademark holder — can use the mark.
2. Federal registration allows the trademark holder to file a trademark infringement lawsuit against competitors and copycats who sell similar products under the same or confusingly similar brand name.
3. Federal registration gives the trademark holder the peace of mind that they can properly invest in and build up the brand. By allowing for exclusive use of the trademark, trademark holders can confidently invest in the brand and strive towards building customer loyalty. 
4. Federal registration can provide indefinite protection of a trademark. So long as the mark is continually used in commerce and the proper maintenance and renewal filings are made, a trademark can remain registered forever.
5. Federal registration allows the trademark holder to leverage the power and benefits of Amazon Brand Registry program. This allows trademark holders to easily file and resolve complaints against trademark infringement from copycat sellers on Amazon.
6. Federal registration provides a myriad of other legal protections that an unregistered, common law trademark is not afforded.

Establishing Your Brand on Amazon Brand Registry

For many sellers doing business on Amazon's e-commerce marketplace, registration on Amazon Brand Registry is absolutely vital. If you need help obtaining a federal trademark registration, to ensure Amazon Brand Registry eligibility, you can contact the professional attorneys at Law Offices of John D. Gugliotta, P.E., Esq., LPA. Our trademark experts can help you secure the federal registration that you need to benefit from Amazon's Brand Registry. Contact us today here, or call us at (888) 298-8580.

The Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.

Like many business owners these days, you probably have some sort of presence, and do some amount of business, on social media. You may even do business exclusively on social media — specifically on popular sites like Facebook and Twitter. What happens, though, when it comes time that you want to sell your business? Can you do this, or do the Facebook and Twitter terms of service agreements prohibit this kind of sale? Let’s take a look, and then discuss what you can do to transfer your business’s social media accounts to a buyer.

Facebook

Facebook’s terms of service provide that you “own all of the content and information you post on Facebook.” Facebook Terms of Service §2. However, Facebook prohibits users from “transfer[ring]” accounts — both personal accounts and Pages used for businesses — to anybody without first obtaining Facebook’s written permission for such a transfer.

This appears to mean that, while you retain ownership rights for the content that you or your business posts to Facebook, your ownership rights are restricted. You cannot transfer your Facebook account or Page to another person or entity without first obtaining written permission from Facebook itself.

Twitter

Similarly, Twitter has prohibitions on transferring accounts. Unlike Facebook, however, Twitter has implemented a much more stringent prohibition. Like Facebook, you own the content that you post to Twitter and it’s services. Twitter Terms of Service §3. Also like Facebook, Twitter provides that “[y]ou may not buy or sell Twitter usernames.” Twitter Rules. Unlike Facebook, however, Twitter does not carve out an exception to allow sales of usernames with their written permission. Put simply, this means that you cannot exchange money for the transfer of a Twitter username.

How to Sell Your Online Business

    Violating the Facebook or Twitter Terms of Service may result in the account in question getting removed or banned entirely from the website. When trying to sell a business that is mostly (or exclusively!) conducted on these websites, having the page being in violation of the service’s terms of service would be catastrophic. However, there is a simple way to protect yourself and future-proof your online business, all while still keeping the avenue open to sell your business in the future. You should not operate your online business as a sole proprietorship, but rather establish a Limited Liability Company (LLC) to operate your business under. There are many other excellent reasons for organizing your business as an LLC which are outside the scope of this article. However, if your business is an LLC, and the LLC owns and operates the Facebook and Twitter pages, then you can sell the LLC itself instead of the social media account. Even if the LLC’s ownership changes, the LLC itself is still the owner of the Facebook or Twitter profiles. 

To set up a new Facebook Business account, owned and operated by your new LLC, first log out of facebook from your personal account. Next, navigate to https://www.facebook.com/business. Then, create your account. When it asks you to log in, chose the option which says “I don’t have a Facebook account.” From their, enter your new LLC’s business email address, desired password, and all other required information. This will let you create a Facebook Page that is owned wholly by your new LLC, and not tied to your personal account. 

If you already operate a Facebook Page linked to your new account, you will need to acquire written permission from Facebook to transfer this Page to your new LLC. We may be able to help you with that!

Neither Facebook nor Twitter can prohibit businesses with accounts on their websites from transferring or otherwise modifying their ownership. Thus, the account(s) will not have been “transfer[red],” in violation of Facebook’s Terms of Service, nor will the username have been bought or sold, in violation of Twitter’s Rules. This is because the transaction was for the LLC itself and not the social media account(s) only. This avenue provides you the ability to do business on Facebook or Twitter, protect yourself from personal liability, and sell the business later on — all without violating Facebook or Twitter’s terms or service and rules.

If you have questions about organizing a business structure, such as an LLC, or how to obtain Facebook’s written permission to transfer Pages to new entities, you should contact a registered attorney. We are pleased to offer our services, so please contact us to discuss your options!

Law Offices of John D. Gugliotta, P.E., Esq., LPA publishes this blog for educational purposes only, not to provide specific legal advice. By using this blog site you indicate that you understand there is no attorney-client relationship between you and the Law Offices of John D. Gugliotta, P.E., Esq., LPA. This blog should not be used as a substitute for obtaining legal advice from a licensed attorney. In addition, statements made on this blog represent the viewpoints of the individual authors, and do not necessarily reflect the views of Law Offices of John D. Gugliotta, P.E., Esq., LPA or any of our clients.