"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.

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.

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.

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.