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.

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.

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.

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.