Top IP and Trademark Law Topics of 2022
Alt Legal Team | December 04, 2022
Here's a round-up of the biggest stories and trends in IP and trademark law that we've seen in 2022. We've published several articles and produced webinars on these key topics throughout 2022, so here's your chance to read up (and "watch up") so you can be fully prepared to take on the most pressing issues affecting your IP and trademark practice next year. You can expect that these important topics will continue gaining momentum in 2023.
NFTs made headlines throughout 2022 in mainstream press as well as in the context of IP law. Brand owners continued to file NFT and NFT-related trademark applications with great enthusiasm. As of Oct 1, 2022, the USPTO had received over 4600 trademark applications that include or relate to NFTs.
NFT sales have dropped throughout 2022, and many outlets reporting the dramatic drop as a "collapse" or "implosion," with the NFT marketplace proving to be so volatile and so many IP/NFT issues left mostly unresolved, so this is an important area for IP lawyers to continue to watch throughout 2023.
Check out our overview of the most important NFT IP-related disputes in 2022.
Alt Legal NFT Resources:
What do Trademark Attorneys Need to Know About NFTs?
Alt Legal Webinar: Fun with Non-Fungibles: NFT and blockchain basics for IP attorneys
What IP Attorneys Need to Know About Cryptocurrency and NFTs: An Interview with Moish Peltz
Metaverse/Web 3
Like NFTs, Web 3 (or the metaverse) also made a big impact in 2022 on IP law. As of October 1, 2022, the USPTO had received over 4600 trademark applications for metaverse and/or virtual goods or services.
What exactly is Web 3/the metaverse? It's the next evolution in the Internet. Whereas Web 2 is used to describe the Internet where sites are collaborative and users generate content, Web 3 is decentralized and data is stored on peer-to-peer networks. The Metaverse is a digital world and users create an avatar that is used to interact with people in the digital world. In turn, avatars interact with other avatars and businesses that have purchased real estate in the metaverse and have virtual stores and goods and hold virtual events. Web 3 offers many benefits, particularly in that it uses machine learning to produce faster and more relevant results and personalized product recommendations.
Web 3 is trustless, meaning users can participate without using an intermediary like Facebook or Amazon and can be accessed from any source, not just a computer or a phone. A significant challenge to the fact that users can enter Web 3 from many different sources is that there are no terms of service that apply, which is particularly challenging as users jump from platform to platform.
Throughout 2022, some of the main issues that have emerged relating to Web 3/the metaverse include:
Without a single entryway into the metaverse, how do we determine whose law applies?
What resources are available to help stop trademark infringement in the metaverse where it's unclear whose terms and conditions apply as users jump from platform to platform?
How can we monitor trademark infringement in the metaverse when it exists in real time and on multiple platforms?
In light of these issues, some strategies that brand owners have undertaken to protect their brands and valuable IP in the metaverse include:
Registering NFT and metaverse marks as trademarks (Class 9; refer to ID manual for descriptions)
Purchasing cryptowallets and blockchain domains
Alt Legal Metaverse Resources:
Alt Legal Webinar: What's the Meta with You?: Trademark protection in the metaverse
Trademark Modernization Act (TMA)
The Trademark Modernization Act (TMA) went into effect December 21, 2021, creating two new ex parte procedures: expungement and reexamination, to challenge registrations for nonuse. Throughout the past year, the USPTO has received over ___ TMA petitions. The USPTO created a webpage tracking all of the expungement and reexamination proceedings. Additionally, we've written an article summing up the first year of TMA filings before the USPTO, including lessons learned and suggested tips and strategies.
The key issues emerging out of TMA filings this year include:
How to initiate a successful petition
How to conduct a reasonable investigation
We've produced extensive content on these specific issues as well as the TMA generally. In short, key to initiating a successful petition is to ensure that you've demonstrated a prima facie case of non-use at any time (expungement) or before the relevant date (reexamination). In order to demonstrate a prima facie case, petitioners must follow all administrative instructions, especially including providing evidence with proper labeling and an index, as well as translations, where applicable. Petitioners must also pay close attention to the dates at issue and provide evidence of not just current nonuse but past nonuse as well. Petitioners must conduct reasonable investigations, which is a high standard to meet. Petitioners must show evidence of nonuse in all relevant trade channels and be careful not to include evidence of use.
Alt Legal Resources:
Blog Article: USPTO Update: The Trademark Modernization Act – One Year In
Blog Article: A PI's Pringles® — TMA Filings
Blog Article: A PI's Perspective: How to Conduct Reasonable Investigations for Expungement & Reexamination Proceedings
Blog Article: USPTO Webinar Summary: Insight into TMA Nonuse Cancellation Petitions
Blog Article: How to File an Expungement or Reexamination Proceeding: Step-by-Step TEAS Form Guidance
Blog Article: USPTO Update: TMA Expungement and Reexamination Proceedings
Blog Article: The Trademark Modernization Act (TMA)'s New Reexamination Procedure
Blog Article: The Trademark Modernization Act (TMA)'s New Expungement Procedure
Blog Article: USPTO Implements Trademark Modernization Act (TMA) Final Rule
Alt Legal Webinar: Acting on the Trademark Modernization Act: How the implementation of the TMA will affect your practice
Blog Article: Modernize Your Approach to Trademarks: Understanding the Trademark Modernization Act
Alt Legal Webinar: Restoration by Modernization: How the Trademark Modernization Act of 2020 Supports Consumer Expectations and Promotes Access to Justice
Copyright and Transformative Use – SCOTUS Takes on Circuit Split in Warhol v. Goldsmith
Throughout 2022, IP practitioners have been eagerly watching the Warhol v. Goldsmith dispute unfold before the Supreme Court. In March 2022, the Supreme Court granted certiorari and agreed to hear the case in its 2022-2023 term. Most recently, in October 2022, the Supreme Court heard oral arguments from the parties.
The case stems from a dispute between the estate of Andy Warhol and photographer Lynn Goldsmith over her series of photographs depicting Prince. One of Goldsmith's photos was licensed by Vanity Fair magazine to be used as an "artistic reference," and Andy Warhol was commissioned to create a painting based on the photo. Warhol proceeded to create the Prince Series, a collection of 16 paintings. For nearly 30 years, Goldsmith was unaware of the Prince Series. However, once she became aware of the series, she contacted Warhol's estate claiming that the paintings were copyright violations of her photographs.
In the Federal District Court, the judge ruled in favor of Warhol, finding that Warhol had sufficiently demonstrated transformative fair use with his treatment of the photograph. When the case was appealed to the Second Circuit, the judge reversed the lower court's decision and found in Goldsmith's favor, determining that Warhol's claims of transformative fair use fail because the series "retains the essential elements of the Goldsmith photograph without significantly adding to or altering those elements."
Warhol's estate appealed the case to the Supreme Court, and the court agreed to hear the case. This important decision by SCOTUS will settle the circuit split between the Second and Ninth Circuits about how courts perform a fair use analysis. Congress set forth four nonexclusive factors for courts to consider in determining whether copying is fair use (17 U.S.C. § 107):
the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
the nature of the copyrighted work;
the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
the effect of the use upon the potential market for or value of the copyrighted work.
However, courts have developed an inconsistent approach to applying these factors. In Warhol v. Goldsmith before the Second Circuit, the court found that the Prince Series was not transformative within the meaning of the first factor, that even though Warhol's works were immediately identifiable as his art, it was insufficient to constitute fair use. In contrast, the Ninth Circuit found in Seltzer v. Green Day that the first factor is the most critical in determining fair use and that fair use is established when, the "new work…adds something new, with a further purpose or different character, altering the first with new expression, meaning or message."
IP practitioners are eagerly waiting for the Supreme Court to decide Warhol v. Goldsmith and hoping that the Court will issue clear guidance for lower courts in how to apply the statutory language in determining transformative fair use. This decision will also have important implications for creators as they use or reference other artists' works and want to avoid copyright infringement claims.
Alt Legal Copyright Resources:
Alt Legal Webinar Copyright and Copywrong: What trademark attorneys need to know about copyright
Alt Legal Webinar: Overlapping Your Boundaries: Layering copyrights, patents, and trade dress to bolster brand protection
Alt Legal Connect Session Summary: Licensing: Using Trademarks and Copyrights as Business Assets
USPTO Cracks Down on Fraud
In recent years, the USPTO has taken significant measures to protect the trademark register and crack down on fraud. The USPTO has implemented several strategies throughout 2021 and 2022 to address scams and fraud on the USPTO:
Reorganizing trademark registration system. The USPTO is working hard to implement processes across the registration system to address fraud. One example is that the USPTO set up an automated bot to query owner addresses against the US Postal Service's database to see if a submitted address is improper and should be refused by the Examining Attorney.
Administrative sanctions. The USPTO created a new administrative sanctions process to investigate and invalidate improper trademark-related submissions. Under this process, when a submission appears to violate the Trademark Rules of Practice or the USPTO website's Terms of Use, the USPTO will issue administrative orders that may result in sanctions being imposed.
Communication with customers. As a result of the USPTO's crackdown on fraud, many applications are being terminated and registrations are sanctioned. It's imperative that the USPTO work to educate customers to explain what has happened and how to prevent it from happening in the future. The USPTO is working on outreach efforts through social media and has created a new page to educate customers about scams in a very accessible way.
Access controls. The USPTO implemented ID verification to help prevent improper users from accessing the USPTO filing system. ID verification is role-based, and trademark customers choose a role prior to verifying their identity.
Post-registration audit and TMA nonuse proceedings. These new processes and tools are helping to protect the integrity of the register and clear the USPTO register of marks that never should have been registered in the first place due to scams/fraud in the application process. The USPTO recently delivered a webinar discussing TMA proceedings filed thus far and maintains a webpage detailing all of the TMA proceedings filed. Also, check out our Alt Legal Connect session about the post-registration audit program.
Alt Legal USPTO Resources:
USPTO Update Q4 2022: Trademark Public Advisory Committee (TPAC) Quarterly Meeting
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