Trademark rights exist primarily to avoid consumer confusion. They prevent two companies from selling competing products that use similar marks. With the rise of e-commerce, however, enforcing trademark rights, or even securing your desired trademarks for a brand, has become much harder. Read more
After seven years of litigation at the Trademark Trial and Appeal Board, the Ingham County Circuit Court, and the US District Court for the Western District of Michigan, many, many, many sleepless nights, and some of our best legal work, the Attorney General of the State of Michigan has dismissed its trademark cancellation proceeding against M22 with prejudice.
What You Should Know About the EU Copyright Directive
In February 2019, the European Union finalized its proposal for reforming its copyright laws, titled “Directive on Copyright Law in the Digital Single Market.” If passed, this EU directive on copyrights could have far-reaching consequences for online service providers and managers of online communities. Read more
Protecting Your E-Commerce Business From Data Breach Liability
Data breaches pose a significant risk to e-commerce companies. Although the internet has opened up an entirely new world, allowing entrepreneurs to make money online from the comfort of their own homes, it has also opened up potential serious new hazards of which all companies should be aware. Read more
Revision Legal’s Michigan trademark lawyers are experts in trademark law. Our Michigan trademark attorneys have handled trademark registration, trademark licensing, and trademark litigation in state and federal courts around the United States. Our Michigan trademark lawyers are licensed to practice in the state courts of Michigan, the Eastern District of Michigan, and the Western District of Michigan.
Revision Legal’s trademark lawyers are experienced in all manners of trademark prosecution, defense, and litigation, including:
- Trademark registration with the United States Patent and Trademark Office;
- International trademark registration;
- Trademark Trial and Appeal Board oppositions;
- Trademark Trial and Appeal Board cancellations;
- Trademark litigation in federal court;
- Trademark licensing and merchandising;
- Cybersquatting and trademark domain name disputes; and
- Trademark monitoring.
Our trademark attorneys regularly handle trademark clearances and trademark registrations, including complex and non-traditional trademark registrations. Our attorneys have represented some of Michigan’s most well known brands, ranging from multinational insurance companies, microbreweries, lifestyle brands, and startups.
If you seek a Michigan trademark lawyer, contact the attorneys at Revision Legal at 855-473-8474 or use the form on this page.
BitTorrent Copyright Defense
Few things are more frustrating than being sued for something you were not aware was happening and did not do. Unfortunately, this is the situation that many individuals or business owners find themselves when they receive a letter from their Internet Service Provider (ISP) informing them that they are the subject of a copyright lawsuit.
Here is what you need to know about these cases and what your options are.
How BitTorrent Works
BitTorrent is a method for sharing and downloading large files online. There are a number of different BitTorrent programs out there, but they all work by breaking up large files into “bits.”
If you download this file, instead of receiving it from one source, you receive various “bits” from several other computers that have the same file. This lets large files be shared quickly among multiple people.
BitTorrent itself is not illegal – many companies use various protocols to share files internally or to make open source software available to the public.
However, not every file is shared across BitTorrent platforms with the permission of the copyright owner. Movies, books, songs, and television programs are often shared illegally.
Some copyright holders may ignore these downloads, or – as HBO does for Game of Thrones downloaders – send letters requesting that the activity stop. However, others take a much more aggressive stance.
Copyright holders who are extremely aggressive in enforcing their copyrights in court are known as copyright trolls.
Although activity online, including downloading movies, television shows, or songs, seems to be anonymous, it is not. Copyright trolls are able to trace the IP address of the user completing the download. The IP address can translate to a physical address and an internet service provider.
With this information, copyright trolls are able to file a complaint in court and ask a judge to issue a subpoena ordering the ISP to turn over the identity of the account-holder. Even if the account-holder is not the person doing the downloading – a very real possibility – this person likely has information about whom the downloader is likely to be.
While this may seem like a fair and logical way to proceed, copyright trolls are infamous for spamming the federal court system with hundreds, if not thousands, of lawsuits at any given time. Some plaintiffs, such as Malibu Media, will sue only one defendant at a time, but others will file lawsuits against dozens of people at one time.
Because it is not humanly possible for these companies to proceed with every lawsuit against every defendant, it is becoming increasingly obvious to judges that these plaintiffs are only looking for quick settlements and to move on to the next victim. One judge issued harsh criticism of this practice last year, saying that the plaintiffs are treating his courtroom “like an ATM.”
In addition to Malibu Media, Strike 3 Holdings has also been actively filing copyright lawsuits in recent months. Both own copyrights to adult material, so the embarrassment factor of being associated with this type of case can encourage people to settle who may be otherwise inclined to fight.
Defending Against a Copyright Troll
If you are dealing with a copyright troll in court, you may be able to raise a number of defenses to fight the claims.
Someone Else is the Infringer
If you know for a fact that someone else did the infringing activity, you may be able to turn this person over to the copyright troll in order to redirect focus from you. However, this can be tricky because you may not want to throw a family member or an otherwise good employee to the mercy of the plaintiff. Occasionally in this situation, the person who actually did the downloading will agree to pay a settlement in order to avoid the risk to both the account-holder and themselves.
The Case was Filed in the Wrong Jurisdiction
In order for a lawsuit to proceed, the case must be filed in the proper jurisdiction. If you have never set foot outside of Michigan, you can not be sued for copyright infringement in Ohio.
Although copyright trolls claim that their methods of determining the location of the infringing activity is highly accurate, this is not necessarily the case.
If you are involved in a copyright lawsuit that was filed somewhere other than where your home is located, you may be able to have the case dismissed for lack of jurisdiction.
The Case was Filed After the Statute of Limitations Expired
A copyright holder must bring a lawsuit within three years; otherwise, they can not bring the case. If a copyright holder attempts to sue you for downloads they claim occurred more than three years ago, the judge can dismiss the case because the troll waited too long.
Settling the Case Outside of Court
Although it is not the answer for everyone, sometimes settlement can be the best option if you are being sued by a copyright troll. If you know that you were the one who did the downloading, you may decide to settle rather than risk paying attorneys fees and statutory damages for infringement.
You may also decide that you do not want any potential negative publicity for your company or yourself. While some judges will allow copyright defendants to proceed anonymously if the copyrighted materials are adult in nature, not every judge will. Rather than take the risk, some people will decide it is in their best interests to settle quietly outside of court.
Preventing Copyright Lawsuits
The best way to protect yourself from being faced with a copyright troll lawsuit is to limit the number of people who can use your WiFi. If this is not possible due to business requirements, you should educate your employees about using the internet responsibly and enact policies designed to prevent this kind of unauthorized use with company materials.
This article is for informational purposes only and does not contain legal advice. If you are being pursued by a copyright troll or have questions regarding copyright infringement, or other intellectual property matters, contact our experienced Internet Attorneys today with the form on this page, or call us at 855-473-8474.
Copyright and “Fair Use”
Being sued for copyright infringement can be a serious matter. Civil statutory damages can be as high as $150,000 per infringement if you are found liable for copying someone else’s work without permission.
However, there are certain affirmative defenses you can raise that would “excuse” the infringing activity. Perhaps the most common affirmative defense is “fair use,” in which you are able to use the copyrighted material without obtaining permission from the copyright holder.
Four Factors to Evaluate Fair Use
Section 107 of the Copyright Act lists four factors that a court should use in determining if someone’s use of a copyrighted work falls into fair use of the work.
1. Purpose And Character of the Use
Courts will consider the purpose and character of the use, including whether the use was commercial in nature or for nonprofit educational purposes.
If I own the copyright on a picture I took, and a business uses that picture in its advertising materials without my permission, this could be considered infringement with no fair use involved.
On the other hand, if a student uses the picture as part of a project for class, the student’s use is more likely to be considered fair use of the photograph.
This is not to say that all commercial transactions are denied the ability to claim fair use. If a graphic artist transforms the photograph into something new and sells this new work, the artist may be successful in pleading a fair use defense.
This “transformative” element is particularly important in avoiding copyright infringement – if you want to use the work, you should add or build on it.
2. Nature of the Copyright Work
The courts will consider the nature of the copyright work, and specifically the amount of creativity that went into the creation of the work.
If the work is largely technical or a news item, such as a simple whitepaper, it is more likely that fair use defenses will be successful, than if the work requires a high degree of creativity, such as a novel or a movie.
3. Amount And Sustainability
Courts will look at the amount and sustainability of the copyright work that has been used.
If you use a small clip of a TV show, song, or movie in an advertisement, it is more likely to be considered fair use than if you use the entire work.
However, even using a small clip may be enough to amount to full infringement, depending on which portion of the work you are using, if it is “the heart and soul” of the work in question.
4. Effect on the Work’s Value
The courts will also look at the effect on the work’s value.
Courts consider both the effect of the defendant’s particular use, as well as the effect that such uses, if widespread, would have on the marketability of the original work in question.
Specifically, courts examine if the original work is losing, or could lose sales, if the use continues and is widespread.
An additional factor that courts typically consider is whether the work is properly attributed to the author.
There is not a specific formula that courts use to determine if the defendant in a copyright infringement case is covered under the fair use defense.
Instead, courts will look at all the facts in the case before making a decision. However, there are a number of scenarios that are more likely to sustain a fair use defense.
Common Fair Use Scenarios
Criticism, Comment, and News Reporting
In general, copyrighted works may be discussed and even sampled by critics. It is common for book or musical album critics to quote an author or songwriter when reviewing a work. Similarly, news reporters are generally allowed to show clips of television or movies, or play a portion of a song without permission from the copyright holder.
This type of fair use defense typically succeeds when there is something transformative about the use. The commentators copying the work are giving an opinion, comparing it to other works, or engaging with it somehow.
The fair use defense has been successful in situations in which the copyright holder attempts to silence critics of the work. Criticism is by nature transformative, so it is permitted under this defense.
Teaching, Scholarship, and Research
Academics are typically also allowed to use copyrighted works without gaining permission of the author.
Teachers are typically allowed to make copies of short stories, book excerpts, poetry, or song lyrics for students in class, up to a certain extent. However, they may not make unauthorized copies of entire novels to distribute to the class, unless those works are old enough to be part of the public domain.
Students and researchers may also quote copyrighted works in projects, reports, and dissertations because they are generally engaging with the work and transforming it into something new.
Parody, a subset of commentary or criticism, is one of the most common types of fair use defense. Under parody, the work is being used in a humorous way or for social commentary.
Parody requires a certain amount “borrowing” from the original copyrighted work in order to make a point, which is why it is generally permitted as a fair use defense.
Fair Use: Avoiding a Copyright Lawsuit
The best way to prevent a copyright lawsuit is to obtain permission from the copyright holder for your use. However, this is not always possible, especially if tight deadlines are creeping up or if you wish to criticize the content of the copyrighted work.
If you are unable to obtain the permission, the next best thing you can do is ensure that you are adding to the original work by transforming it into something new.
You should also be selective about which portions of the work you utilize. If you take too much, you use may be considered infringement, even if you are offering valid criticism or creating a thoughtful parody of the work in question.
This article is for informational purposes only and does not contain legal advice. If you have questions regarding copyright protection, copyright infringement, or other intellectual property matters, contact our experienced IP attorneys today with the form on this page, or call us at 855-473-8474.
Protecting Your Trademarks From Infringers
Trademarks are an important way to protect your brand’s reputation. They also protect consumers because trademarks allow consumers to determine the source or origin of goods or services.
Filing for trademark protection is the first step in enforcing your brand rights. However, in order to maintain protection your brands, you must diligently monitor third party use of these marks and pursue infringers for their illegal use of your brand.
Here are some tips for monitoring and enforcing your trademarks.
Monitoring for Trademark Infringement
The internet makes it easy to conduct searches for potential infringement of your brands. You can set up Google alerts to automatically tell you if your brand names, or similar brands are appearing in the news, on blogs, or on other sites.
You should also make it a regular practice, either once a month or more often, to conduct manual searches of sites allowing individuals or companies to list products, including Amazon, Ebay, and Etsy. Do not forget international sales sites, such as Alibaba and AliExpress for products being sold in international markets.
You can also conduct searches of pending trademark applications using the US Trademark Office’s online search tool. If you discover a pending mark that you believe is similar to a brand that you own, you can oppose that mark’s registration.
If you determine that someone is infringing on your trademarks, you can choose whether to attempt to resolve the matter outside of court, by sending a cease and desist letter, or you can proceed directly to a trademark infringement lawsuit.
Cease and Desist Letters
Typically, if someone is infringing your marks, you will begin by sending a cease and desist letter to the infringing party. It can be a useful way of ending the infringement without the extra time and expense associated with going to court right off the bat.
A cease and desist letter has four components. First, it introduces you and your legal claim to the trademark, typically by including information regarding your trademark registration.
Second, it identifies the infringing item. For example, if Mary’s t-shirt company owns a trademarked logo that includes the silhouette of a pig surrounded by a circle, and Nancy begins selling shorts that use a logo that is very similar to Mary’s logo, Mary’s cease and desist letter will demonstrate the similarity between the two marks, with photographic evidence.
Third, the cease and desist letter will list the steps you expect the infringing party to take. These steps typically include:
- Immediately stopping all use of the infringing mark by removing items containing the mark from their online or brick-and-mortar stores, website, or other marketing materials
- Showing proof of compliance within a certain time period, typically 10 days
Depending on the extent of the infringement, you may also ask the other party to pay you a settlement so that you will not pursue further legal action. It is also possible that the two parties reach a licensing deal, where the other party will start paying your company in order to use your brands on their products.
Finally, your cease and desist letter will inform the other party that you can and will take further legal action by filing a trademark lawsuit if the other party does not comply with your demands.
Although cease and desist letters carry the specific and serious threat of a federal trademark infringement lawsuit, we often hear stories of amusing takes on the letter. For example, in 2017, Bud Light sent a town crier with a scroll to deliver an amusing cease and desist letter to a brewery selling beer utilizing one of A-B InBev’s brands (Bud Light’s parent company). The message got the point across in a humorous but effective way. This can be a useful approach if you are concerned about your company’s public perception but still want to maintain exclusive rights to your brands.
Filing a Trademark Infringement Lawsuit
If your cease and desist letter is unsuccessful in stopping the infringing activity, or if you decide to take a more aggressive approach from the outset, you can file a trademark infringement lawsuit in federal court.
Filing a lawsuit does not foreclose the possibility of settling outside of court – often parties will be in settlement discussions while they are filing motions and taking depositions to prepare for trial.
Because federal lawsuits can take a year or more to resolve, you may not have a quick decision regarding the alleged infringement. However, filing lawsuits against infringers is a way to show that you are serious about enforcing your marks. If you have a history of successfully defeating infringers in court, you will be able to demonstrate your successes in future cease and desist letters you may need to send.
Consequences of Failing to Enforce Your Trademarks
It is important to remember that trademark protection requires that you pursue all infringers that you discover using your brands. Failure to monitor and protect your trademarks carries some serious consequences, including:
- Loss of the ability to stop a particular infringer, if you knew or should have known that individual or company was infringing your marks
- Loss of trademark rights altogether if third parties start to use your mark in connection with goods or services similar to your mark.
Works like “aspirin” and “escalator” used to be trademarked, but because these names were used so often by third parties, they became genericized, essential creating a free-for-all allowing everyone to use these terms. This process can happen extremely quickly – for example, Apple created the “App Store” trademark and lost the exclusive right to use the name in less than two years.
Do not let this happen to your cherished intellectual property – take the time to properly monitor and enforce your brands.
This article is for informational purposes only and does not provide legal advice, nor does it create an attorney-client relationship. If you have questions about trademark filings, contact the experienced trademark attorneys at Revision Legal. We can be reached today by using the form on this page or by calling us at 855-473-8474.
Selling Your E-Commerce Business
Selling your e-commerce business that you worked hard to set up can be difficult. It can represent the end of a chapter in your life, and you want to be sure that when you let it go, you do it the right way.
When you decide to sell your e-commerce business, consider the following steps to help maximize your profit while limiting your potential liability.
Understand Your Motivation to Sell
There are a variety of reasons that you may decide it is time to sell your e-commerce business. Maybe you are ready for a new challenge in a different industry. Maybe you want to spend time with your family, or you are ready to retire. Maybe you are just burnt out and want a break.
You should get to the roots of why you want to sell your business because this will help you determine your priorities in the sales process. For example, if you are exploring selling your company because you want to retire in the next six months to a year, you probably are willing to wait a little longer than someone who is one irate customer away from changing their name and catching the next flight to Fiji.
Your psychological motivation will help you set a sales timeline and will influence the ultimate selling price.
Determine What Your Business is Worth
The next step in selling your e-commerce business is to evaluate what it is worth. One estimate is that an e-commerce company typically sells for two to three times the net profit, if the business brings in between $20,000 and $2 million each year.
- However, you should still weigh a number of factors before setting a sales price:
- Monthly and annual total revenue
- Revenue for each product
- Monthly and annual sales volume
- Value of your current inventory
- Amount of time, effort, and money spent on marketing
- Total number of customers
- How much it costs to acquire a single customer
- Number of repeat customers
- Projected short-term and long-term growth.
You should also do some research on any competitors or similar businesses, to determine what they sold for. Viewing other listings will help you determine what are, and aren not, important in a listing.
Often, if you work with a broker or e-commerce attorney, he or she will help you with these steps so that you can know what to expect before your company hits the market.
Get Your Financial Details in Order
Any serious potential buyer will want to see the financial statements of a company before agreeing to invest in it. You should take the time to get your bookkeeping in order to make it easy for your potential buyers to view proper income statements and balance sheets.
If you need to hire a professional accountant in order to complete this step, it is well worth it. Perspective buyers do not want to spend time sifting through messy paperwork to find the details they are looking for. Disorganization may also raise serious red flags for buyers, who may wonder if you are trying to hide something underneath all the mess.
Find Ways to Increase the Value of Your Business Before Selling it
When trying to increase the value of a home, owners may take the time to make some aesthetic changes to the home, such as updating the paint or having professionals steam clean the carpet.
Similarly, a business owner may decide to invest a little extra time before selling an e-commerce company in order to bring in a potentially higher sale. For an e-commerce business, this may involve updating your website, especially if it’s using an outdated theme or older pictures that take too long to load.
In addition to having your financial statements prepared for potential buyer consideration, you can also prepare forward-thinking documents, showing potential growth areas in the industry and in your customer base. You can also show a history of success, whether from streamlined operations, widespread brand recognition, a large number of repeat customers, or a low number of consumer complaints. In short, be prepared to demonstrate why your business will be successful in the future.
Finding Brokers and Potential Buyers
Whether or not to hire a broker is a personal decision and is dependent on how hands-on you want to be with the sale. It is possible to sell a business without hiring a broker, and there are a number of websites designed to let owners do just that.
Brokers will be able to help you connect with potential buyers and help you negotiate the deal. However, they will typically charge a commission on the sales price for the e-commerce business.
If you decide to hire a broker, you should select someone you feel comfortable with and who can give you a realistic view of what the sales process and timeline will look like.
Prepare Contracts and Close the Deal
Once you have a buyer, you should have purchase and sales agreements drawn up by an experienced e-commerce lawyer. At minimum, your contract should list:
- The parties involved,
- What is included in the sale – this can include physical inventory, but also intangible assets such as your intellectual property, as well as debt obligations the buyer will assume as part of the sale
- Disclosures of known liabilities, such as lawsuits or fines
- The agreement on how payment will be made, for example as a lump sum or as installment payments
- Any brokers or agents involved in the deal, and
- The signatures of the parties
Your attorney will help ensure that everything is covered in the purchase and sale agreement, so that you can look ahead to the next chapter. This article is for informational purposes only and does not provide legal advice. Revision Legal has significant experience assisting e-commerce owners through selling their businesses, including negotiating deals, drafting purchase and sales agreements, and assisting with all manners of intellectual property transactions. In order to schedule an appointment with an internet lawyer, contact us today with the form on this page, or call us at 855-473-8474.
Protecting Your Company From Copyright Issues in 2019
As 2019 begins to swing into gear, it can be a good idea to review your company’s potential liability for copyright disputes and possible copyright infringement issues in order to avoid big surprises later on. Here are a number of issues to think about this year:
Avoiding Copyright Infringement: Knowing Who Owns What
Knowing who owns what is an important component of avoiding copyright infringement. Under the current US framework, a work automatically receives copyright protection when it is created. The question of “who owns the work” can be simple or complicated depending on the employment relationship, or lack thereof, between the creator and the person paying for the creation.
For example, Jill is an accountant. In her free time, she enjoys taking photographs of her dogs. Jill owns the copyright for every photograph she takes. If her boss asks her to take some photographs of the office, however, these photographs may be considered works for hire because they were created within the scope of Jill’s employment, and therefore may be owned by the firm.
On the other hand, Jack is a professional photographer and videographer. Jill’s accounting firm hires Jack to take photographs of all the employees to put on the firm’s website and to assist in creating a series of YouTube videos advertising the firm’s service. Because Jack may be considered an independent contractor, as opposed to an employee of the firm, if the contract hiring Jack does not specifically lay out whether the photographs and videos are works for hire, Jack may retain ultimate ownership of the works.
One way to avoid potential confusion is to clearly lay out ownership before any work is created. Including language in the employee handbook and any employment contracts you offer can educate and remind your employees of the company’s ownership of copyrighted materials. You can also include language in any vendor contracts clearly specifying ownership of any copyrighted works created by the contractor. This will assist in avoiding confusion down the road.
Additionally, if you are working with a creative team in a non-employment relationship, it is important to have a contract specifically laying out copyright ownership before the work is actually created. Otherwise, you may find that only one person actually owns the work. That person may agree to assign ownership to the rest of the team, but is not obligated to.
Auditing Your Website’s Images to Ensure You Have the Proper Licenses
If you use some form of stock imagery on your website, you should do an audit of all the images, even if you outsource web development to a professional graphic designer. Remember – just because something is available online does not mean that it is available for free.
Placing copyrighted material on your website that you do not have permission to use can lead to being asked by the copyright holder to remove the work via a DMCA takedown notice, or even a copyright infringement lawsuit.
Instead, it is much better to use images whose owners give explicit permission for you to use them, even if you have to pay a fee.
When reviewing your existing images or investing in new ones, you should review the image license to understand the terms. What kind of attribution do you need to include on the image? What limitations are there, if any, on using the website in online or printed marketing materials? Is there a one-time licensing fee, or will you owe additional fees as your website brings in more traffic?
While there are some sites that allow certain images to be used at no cost, using them may still come with terms and conditions. For example, some are available for non-profit or educational uses, but not for commercial uses. It is important to read the fine print before you open your company up to potential liability.
Avoiding Copyright Trolls by Limiting Access to Your Company’s Internet
Finally, if your company offers internet to your employees, customers, or the general public, you may be opening yourself to liability for copyright infringement.
If someone uses a BitTorrent program such as Popcorn Time on their smartphone, tablet, or computer while connected to your internet, you may find yourself on the receiving end of a copyright lawsuit. Copyright trolls are owners of copyrighted material, who files hundreds if not thousands of lawsuits against alleged infringers, but rarely, if ever, litigate these cases. They are able to trace downloads of their material to specific locations through an IP address, on the theory that the person paying the bill for the internet account is either the infringer or knows who the infringer is.
Even if neither you nor your employees downloaded copyrighted material without permission, if the bill is in your name, you can get dragged into these suits while the copyright troll pursues the true infringer.
This type of copyright lawsuits were on the rise in 2018, with a handful of copyright holders filing thousands of suits in order to obtain IP records from your internet service provider. Typically, these copyright holders are looking to settle cases outside of court for thousands of dollars, rather than go through a long and arduous litigation process.
One way to limit your exposure to these types of cases is to limit access to your company’s internet by putting in a strong password on the Wi-Fi and reminding your employees about what is, and is not, appropriate use of company resources. However, other businesses find it essential to have open Wi-Fi for customers. This is increasingly common in restaurants, bars, and coffee shops. These companies may need to spend some time defending themselves in court from these cases, to the extent of demonstrating that it is impossible to find the true infringer.
This article is for informational purposes only and does not contain legal advice. If you have questions regarding copyright protection, copyright infringement, or other intellectual property matters, contact our experienced IP attorneys today with the form on this page, or call us at 855-473-8474.
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