Twitter has long been known for its blue bird. Created by artist Martin Grasser and two other designers and debuted on the social media site back in 2012, the well-known logo flew the coop this summer after Elon Musk acquired the San Francisco-based company and announced that the long-standing logo would be replaced with an “X.” After a series of Musk-driven blunders, the disappearance of the blue bird has been seen by some as the final straw in the erasure of Twitter as we know it, while also serving as a reminder that, despite the meaningful role many logos play in our cultural life, there is always someone behind the curtain, pulling the strings.
Amid the speculation as to why Musk decided to rebrand Twitter in the first place (and in the process, do away with anywhere from $4 billion to $20 billion in value that the Twitter brand had amassed), one thing is certain: the blue bird is gone. As this iconic logo disappeared from public life – along with “tweets,” the Twitter name, itself, and soon, the free-to-use model of the platform – at least some users were disappointed are left about the loss of a brand that had a hand in shaping the online social fabric for over a decade.
Our evolving relationship with brands
The bigger picture here is that the ways in which consumers relate to brands is evolving. Brands not only advertise on platforms like Instagram and TikTok, but they also have their own profiles, and it is not uncommon for their communications can go viral. Brands digitally appear alongside our friends, colleagues, and politicians, and we can text brands for customer service help on WhatsApp alongside family chat groups. In short: We now interact with brands in an increasingly emotional and relational way.
This is part of a larger trend of brands becoming anthropomorphized. Consumers relate to brands in ways that exceed the bounds of an economic, transactional relationship. And brands arouse emotions in us. Nostalgia is now the driving force behind reviving formerly popular brands, as companies “have realized that nostalgia marketing no longer makes you look old. It makes you look familiar,” Kyle Luke, group director of strategy and insights at VMLY&R, told AdAge. “In an attention-scarce world, nostalgia is a shortcut to being familiar in the minds of younger audiences.”
Our emotions are being leveraged by companies in deliberate and explicit ways. As consumers we understand the social capital and value of branding. Despite any feelings we have about Twitter’s former brand, this disappearance reminds us that a brand’s use — and existence — is ultimately outside our control. This is not to say our collective thoughts and feelings about logos do not matter at all. In fact, public pressure has been the driver in some companies rebranding and evolving their logos, particularly racist ones.
Brands as properties
Logos are trademarks, and as such, they are objects of private property, controlled, and owned by companies and/or individuals as assets. Although trademarks are one of the perceptible forms of a brand, logos only have value because we, as consumers, recognize them. We rely on trademarks in the market to decide what to buy, and what brands to trust. In our reliance on brands, and in forming communities around them, we contribute to their value. Yet, in many ways, in the trademark law landscape, we are tourists.
Trademarks constitute an essential aspect of a brand, and the value of today’s leading brands is in the billions. Amazon’s brand, for example, was estimated to be worth $705.65 billion in 2022. With such monetary values in mind and given that trademarks serve as one of the most immediate representations of brands, there is no doubt that they are wildly important to their owners. They are also meaningful to members of the public in various ways, sometimes forming the face of social movements or reflecting our identities, but the ways in which we can make use of trademarks without the trademark holder’s authorization can be quite limited. Using someone else’s trademark without their permission infringes their rights to their logo. While there are exceptions to this protection, such as when a trademark is being used in furtherance of a parody, they are relatively narrow.
Policing unauthorized uses of their logos (and other trademarks) is an important duty that falls on trademark holders; hence, the recurring infringement and dilution lawsuits that brand owners wage. However, there is a balance to be struck since over-enforcement can stand in the way of companies’ appreciating the social roles that trademarks have, and the roles consumers play in helping to develop the meaning behind such marks.
Alexandra Mogyoros is an Assistant Professor in law researching at the intersection of brands, trust, intellectual property and expression at Toronto Metropolitan University. (This article was initially published by The Conversation.)
A new lawsuit provides a peek into the stunning scope of (some of) the copyright and trademark rights that David Yurman boasts in its collection of jewelry products. In the 94-page complaint that it filed with the U.S. District Court for the Southern District of New York on Tuesday, David Yurman claims that Royal Chain Inc. is “misappropriat[ing] [its] intellectual property and undermin[ing] its market position by offering for sale and selling jewelry that copies the designs of iconic David Yurman jewelry pieces, thereby infringing upon Yurman’s world-famous trade dress and trademarks and infringing upon its copyrights.”
According to David Yurman, Royal Chain is engaging in “calculated and systematic” copying, in furtherance of which it seeks to “imitate Yurman jewelry pieces across multiple distinct collections, including by copying structure, insignia, and design flourishes that distinguish Yurman jewelry designs.” As a result of Royal Chain’s practice of “methodically replicat[ing] the distinctive features of Yurman bracelets, rings, necklaces, pendants, earrings, and chains,” David Yurman wages claims of unregistered trade dress infringement and unfair competition; federal copyright infringement; registered trademark infringement under the Lanham Act; and related claims of trade dress infringement and unfair competition under New York common law.
Delving into its rights, Yurman states in the newly-filed suit, as first reported by TFL, that its “iconic designs are protected by numerous common law and federally-registered copyrights and trademarks … and numerous of the designs are so associated with Yurman as to constitute protected trade dress.”
Yurman’s Trade Dress Rights
Turning first to its trade dress rights, Yurman cites its rights in the Cable Classic trade dress, the Helena Neck trade dress, the Helena Center Station trade dress, the Renaissance trade dress, the Yurman X trade dress, the Stacked Cable trade dress, the Crossover trade dress, the Alternating Cable Chain trade dress, the Adorned Bracelet trade dress, and the Streamline Tag trade dress, which it claims have been infringed by Royal Chain, which touts itself as “the industry’s leading supplier of gold jewelry.”
In one example, Yurman alleges that due to its “innovative designs, extensive promotion, and reputation for quality and elegance, the underlying design of certain jewelry pieces from Yurman’s Cable Classics Collection®, The Thoroughbred Collection®, and other related collections has become inextricably associated with the Yurman brand and constitutes a protected trade dress (the ‘Cable Classic Trade Dress’) such that consumers identify Yurman as the source of any jewelry pieces embodying the Cable Classic trade dress.” Yurman claims that it has “uninterruptedly sold and marketed numerous jewelry pieces embodying the Cable Classic trade dress since at least 1993” and sets out the elements of that trade dress as follows …
– A bracelet design comprising Yurman’s signature twisted helix cable configuration, which presents the external appearance of between 6 and 10 individual strands of material entwined with one another to form a single cable;
– A relatively thin (between 3mm and 8mm in thickness), flexible, open cuff bracelet design, comprising an incomplete circular loop of sterling silver, yellow gold, rose gold, or similar precious metals, incorporating a single gap measuring approximately 10-20mm across;
– Rounded and smooth ridges along the length of the twisted cable portion of the bracelet;
– A raised neck at each open end of the bracelet design comprising between 1 and 5 raised bands of sterling silver, yellow gold, rose gold, or similar precious metals; and
– A tapered design from each raised neck to the open ends of the bracelet, which are capped in a rounded shape comprising precious stones, minerals, pearls, or precious metals.
Broadly reflecting on its trade dress rights across its various jewelry collections, Yurman states that it advertises products incorporating the trade dress “extensively,” with such advertisements including “print advertisements in local, regional, and national magazines and newspapers, digital advertisements such as social media and influencer posts, and direct advertising via email and digital search ads.” The New York-based jewelry company further asserts that it “has spent millions of dollars on such advertising,” that such efforts “have led to sales of products incorporating [its] trade dress amounting to hundreds of millions of dollars,” and that the trade dress “has achieved a high degree of consumer recognition and secondary meaning through Yurman’s widespread use, sale, advertising, and promotion of jewelry pieces embodying the trade dress.”
Yurman’s Registered Copyrights & Trademarks
Not limited to protecting its pieces by establishing them as “well-known” trade dress, Yurman contends that “a number of expressions of the Yurman trade dress constitute original works of authorship created by Yurman and [are] protected by copyright.” Among the six registrations that Yurman points to in its complaint, Yurman states that “two of the exemplary Yurman jewelry items embodying the Cable Classic trade dress are also covered by copyright registrations (Reg. No. VAu 405-161 and VA 1-038-299),” making it so that these items are protected by “copyrights in addition to being protected as embodiments of the Cable Classic trade dress.”
Rounding out its claims, Yurman maintains that its Twisted Cable Bracelet design is a registered trademark, consisting of “an open twisted-cable bracelet design with faceted stones at each end. The portions of the bracelet shown in broken lines are intended solely to indicate the positioning of the mark and are not part of the mark.” The company similarly maintains a registration for the configuration of its Renaissance Cable Bracelet design and the “Renaissance” word mark, which are allegedly being infringed by Royal Chain.
What About Dilution?
While Yurman does not make any dilution claims in its complaint, it cites the fame of at least a few of its designs. In what feels like it could be a dilution claim in the making (although, it isn’t), Yurman asserts that “the wrongful reproduction of [its] protected designs … has the natural and intended effect of eroding the goodwill associated with the Yurman brand.”
In terms of the requisite level of fame, the jewelry company might be close when it comes to some of its pieces like the ones that fall into its “Cable Classics” collection. The company has been consistently offering up, advertising, and generating the bulk of its sale from its signature cable bracelet, for instance, since 1983. In the complaint, Yurman does touch on the element of fame, asserting that its Helix Cable Designs are “well known and famous and have been for decades,” citing an article from the New York Times, which referred to the cable designs as “the David Yurman brand’s DNA,” and Vogue commentary that the cable bracelet is “one of the reasons [the Yurman brand] been successful for so long.”
Yurman also states that the Helix Cable Designs “routinely attract unsolicited media coverage, much of which comments on the iconic nature of the Yurman Helix Cable Designs and the strong association between them and the brand itself.” Still, it does not go so far as to make a dilution claim, though.
In light of Royal Chain’s alleged misappropriation, Yurman argues that it is entitled to injunctive relief and damages.
The Bottom Line: The scope of Yurman’s portfolio will not surprise practitioners in the jewelry space, but it is, nonetheless, a noteworthy example of what Knobbe Martens’ Charlene Azema, Bita Kianian, and Robb Roby have called the “many different types of IP strategies that can be used to protect valuable jewelry designs.” They note that “when building an IP strategy, it is important to remember that these different types of protections are not mutually exclusive; a single design could be protected via a variety of different strategies, [which] requires planning and a bit of foresight. Nevertheless, having a robust IP portfolio in place with multiple enforcement options at one’s disposal would be the ultimate crown jewel.”
A representative for Royal Chain told TFL, “We are currently reviewing the complaint. David Yurman has a history of being litigious, and we find the claims baseless. Royal Chain has a sterling reputation serving the jewelry industry with honesty and integrity for over 45 years.”
The rising adoption of artificial intelligence (“AI”) across industries (including fashion, retail. luxury, etc.) that has come about in recent years is bringing with it no shortage of lawsuits, as parties look to navigate the budding issues that these relatively new models raise for companies and creators, alike. A growing number of lawsuits focus on generative AI, in particular, which refers to models that use neural networks to identify the patterns and structures within existing data to generate new content. Lawsuits are being waged against the developers behind some of the biggest generative AI chatbots and text-to-image generators, such as ChatGPT and Stability AI, and in many cases, they center on how the underlying models are trained, the data that is used to do so, and the nature of the user-prompted output (which is allegedly infringing in many cases), among other things.
In light of the onslaught of legal questions that have come about in connection with the rise of AI, we take a high-level (and chronological) look at some of the most striking lawsuits that are playing out in this space and corresponding developments …
Sept. 19, 2023: Authors Guild, et al. v. OpenAI, Inc.
The Authors Guild and more than a dozens authors, including John Grishman and George R.R. Martin, are suing an array of OpenAI entities for for allegedly engaging in “a systematic course of mass-scale copyright infringement that violates the rights of all working fiction writers and their copyright holders equally, and threatens them with similar, if not identical, harm.” In the complaint that they filed with the U.S. District Court for the Southern District of New York on September 19, the plaintiffs, who are authors of “a broad array of works of fiction,” claim that they are “seeking redress for [OpenAI’s] flagrant and harmful infringements of [their] registered copyrights” by way of its “wholesale” copying of such works without permission or consideration.
Specifically, the plaintiffs claim that by way of datasets that include the texts of their books, OpenAI “fed [their] copyrighted works into its ‘large language models,’ [which are] algorithms designed to output human-seeming text responses to users’ prompts and queries,” and which are “at the heart of [its] massive commercial enterprise.” Because OpenAI’s models “can spit out derivative works: material that is based on, mimics, summarizes, or paraphrases the plaintiffs’ works, and harms the market for them,” it is endangering “fiction writers’ ability to make a living, in that the [models] allow anyone to generate – automatically and freely (or very cheaply) – texts that they would otherwise pay writers to create.”
With the foregoing in mind, the plaintiffs set out claims of direct copyright infringement, vicarious copyright infringement, and contributory copyright infringement.
Sept. 8, 2023: Chabonv. OpenAI, Inc.
Authors Michael Chabon, David Henry Hwang, Matthew Klam, Rachel Louise Snyder, and Ayelet Waldman are suing OpenAI on behalf of themselves and a class of fellow “authors holding copyrights in their published works arising from OpenAI’s clear infringement of their intellectual property.” In their September 8 complaint, which was filed with a federal court in Northern California, Chabon and co. claim that OpenAI incorporated their “copyrighted works in datasets used to train its GPT models powering its ChatGPT product.” Part of the issue, according to the plaintiffs, is that “when ChatGPT is prompted, it generates not only summaries, but in-depth analyses of the themes present in [their] copyrighted works, which is only possible if the underlying GPT model was trained using [their] works.”
The plaintiffs claim that they “did not consent to the use of their copyrighted works as training material for GPT models or for use with ChatGPT,” and that by way of their operation of ChatGPT, OpenAI “benefit[s] commercially and profit handsomely from [its] unauthorized and illegal use of the plaintiffs’ copyrighted works.”
Jul. 11, 2023: J.L., C.B., K.S., et al., v. Alphabet, Inc., et. al.
Google and its owner Alphabet are being sued over their alleged practice of “stealing” web-scraped data and “vast troves of private user data from [its] own products” in order to build commercial artificial intelligence (“AI”) products like its Bard chatbot. In the complaint that they filed with a California federal court on Tuesday, J.L., C.B., K.S., P.M., N.G., R.F., J.D., and G.R., who have opted to file anonymously, claim that “for years, Google harvested [our personal and professional information, our creative and copywritten works, our photographs, and even our emails] in secret, without notice or consent from anyone,” thereby, engaging in unfair competition, negligence, invasion of privacy, and copyright infringement, among other causes of action.
Jul. 7, 2023: Silverman, et al. v. OpenAI, Inc.
Mirroring the complaint that authors Paul Tremblay and Mona Awad filed against OpenAI on June 28, Sarah Silverman (yes, that Sarah Silverman), Christopher Golden, and Richard Kadrey (“Plaintiffs”) accuse the ChatGPT developer of direct and vicarious copyright infringement, violations of section 1202(b) of the Digital Millennium Copyright Act, unjust enrichment, violations of the California and common law unfair competition laws, and negligence in a new lawsuit. The basis of the lawsuit: “Plaintiffs and Class members are authors of books. Plaintiffs and Class members have registered copyrights in the books they published. Plaintiffs and Class members did not consent to the use of their copyrighted books as training material for ChatGPT. Nonetheless, their copyrighted materials were ingested and used to train ChatGPT.”
Jul. 7, 2023: Kadrey, et al. v. Meta Platforms, Inc.
The same trio of plaintiffs as above – Sarah Silverman, Christopher Golden, and Richard Kadrey – filed lodged a separate but very similar complaint against Meta Platforms in federal court in Northern California on July 7, accusing the Facebook and Instagram-owner of running afoul of copyright law by way of LLaMA, a set of large language models that it created and maintains. According to the plaintiffs’ suit, “many of [their] copyrighted books” were included in dataset assembled by a research organization called EleutherAI, which was “copied and ingested as part of training LLaMA.”
Jun. 28, 2023: Tremblay v. OpenAI, Inc.
A couple of authors are the latest to file suit against ChatGPT developer OpenAI. According to the complaint that they filed with a federal court in Northern California on June 28, Paul Tremblay and Mona Awad assert that in furtherance of the training of the large language model that powers the generative AI chatbot that is ChatGPT, OpenAI has made use of large amounts of data, including the text of books that they have authored without their authorization, thereby, engaging in direct copyright infringement, violations of the Digital Millennium Copyright Act, and unfair competition.
Among other things, the plaintiffs allege that OpenAI “knowingly designed ChatGPT to output portions or summaries of [their] copyrighted works without attribution,” and the company “unfairly profit[s] from and take[s] credit for developing a commercial product based on unattributed reproductions of those stolen writing and ideas.”
Jun. 28, 2023: Plaintiffs P.M., K.S., et al. v. OpenAI LP, et al.
More than a dozen underage individuals have filed suit against OpenAI and its partner/investor Microsoft in connection with the development and marketing of generative AI products, which allegedly involves the scraping of “vast” amounts of personal data. According to the June 28 complaint, OpenAI and the other defendants have “stolen private information, including personally identifiable information, from hundreds of millions of internet users, including children of all ages, without their informed consent or knowledge” in furtherance of their creation and operation of the ChatGPT, Dall-E, and Vall-E programs. And they “continue to unlawfully collect and feed additional personal data from millions of unsuspecting consumers worldwide, far in excess of any reasonably authorized use, in order to continue developing and training the products.”
The plaintiffs accuse OpenAI of violating: The Electronic Communications Privacy Act; The Computer Fraud and Abuse Act; California’s Invasion of Privacy Act and Unfair Competition law; Illinois’s Biometric Information Privacy Act, Consumer Fraud and Deceptive Business Practices Act, and Consumer Fraud and Deceptive Business Practices Act; and New York General Business Law s. 349, which prohibits deceptive acts and practices unlawful.Beyond that, the plaintiffs also set out negligence, invasion of privacy, intrusion upon seclusion, larceny/receipt of stolen property, conversion, unjust enrichment, and failure to warn causes of action.
UPDATED (Sept. 15, 2023): The unnamed plaintiffs moved to voluntarily dismiss their case against OpenAI and Microsoft without prejudice, which suggests that the parties reached an agreement out of court.
Jun. 5, 2023: Walters v. OpenAI LLC
And in yet another suit being waged against OpenAI, Plaintiff Mark Walters asserts that the company behind ChatGPT is on the hook for libel as a result of misinformation that it provided to a journalist in connection with his reporting on a federal civil rights lawsuit filed against Washington Attorney General Bob Ferguson and members of his staff. In particular, Walters claims that ChatGPT’s case summary (and journalist Fred Riehl’s article) stated that the lawsuit was filed against him for fraud and embezzlement. The problem with that, according to Walters’s lawsuit, is that he is “neither a plaintiff nor a defendant in the lawsuit,” and in fact, “every statement of fact” in the ChatGPT summary that pertains to him is false.
Apr. 3, 2023: Young v. NeoCortext, Inc.
“Deep fake” app Reface is at the center of a proposed class action complaint, with TV personality Kyland Young accusing the company of running afoul of California’s right of publicity law by enabling users to swap faces with famous figures – albeit without receiving authorization from those well-known individuals to use their likenesses. According to the complaint that he filed in a California federal court in April, Young asserts that Reface developer NeoCortext, Inc. has “commercially exploit[ed] his and thousands of other actors, musicians, athletes, celebrities, and other well-known individuals’ names, voices, photographs, or likenesses to sell paid subscriptions to its smartphone application, Reface, without their permission.”
NeoCortext has since argued that Young’s case should be tossed out on the basis that the reality TV personality not only fails to adequately plead a right of publicity claim, but even if he could, that claim is preempted by the Copyright Act and barred by the First Amendment.
Feb. 15, 2023: Flora, et al., v. Prisma Labs, Inc.
Prisma Labs – the company behind AI image-generating app, Lensa A.I. – was named in a proposed class action lawsuit in February, with the plaintiffs arguing that despite “collecting, possessing, storing, using, and profiting from” Lensa users’ biometric identifiers namely, scans of their “facial geometry,” in connection with its creation of custom avatars, Prisma has failed to properly alert users about the biometric data its collects and how it will be stored/destroyed, as required by the Illinois data privacy law.
UPDATED (Aug. 8, 2023): A N.D. Cal. judge sided with Prisma Labs, granting its motion to compel arbitration in the proposed class action, despite the plaintiffs’ arguments that the arbitration provision in Lena’s terms is unconscionable and that “because some provisions in the arbitration agreement arguably fall below JAMS’ Consumer Arbitration Minimum Standards, the arbitration provision is illusory.”
Feb. 3, 2023: Getty Images (US), Inc. v. Stability AI, Inc.
In the wake of Getty announcing that it had “commenced legal proceedings” in the High Court of Justice in London against Stability AI, Getty Images (US), Inc. filed a stateside lawsuit, accusing Stability AI of “brazen infringement of [its] intellectual property on a staggering scale.” Specifically, the photo agency argues that Stability AI has copied millions of photographs from its collection “without permission from or compensation to Getty Images, as part of its efforts to build a competing business.”
In addition to setting out a copyright infringement cause of action and alleging that Stability AI has provided false copyright management information and/or removed or altered copyright management information, Getty accuses Stability AI of trademark infringement and dilution on the basis that “the Stable Diffusion model frequently generates output bearing a modified version of the Getty Images watermark.” This creates “confusion as to the source of the images and falsely implying an association with Getty Images,” per Getty. And beyond that, Getty asserts that “while some of the output generated through the use of Stable Diffusion is aesthetically pleasing, other output is of much lower quality and at times ranges from the bizarre to the grotesque,” giving rise to dilution.
An original Getty Image (left) & one created by Stable Diffusion (right)
In a motion to dismiss in May, Stability AI, Inc. argued that Getty has not even attempted to make a case for jurisdiction under Delaware’s long-arm statute, as it “does not allege that any of the purportedly infringing acts regarding training Stable Diffusion occurred within Delaware.” Instead (and “although the amended complaint is vague in this regard”), Stability AI claims that Getty “appears to allege that the training took place in England and Germany,” pointing to the following language from the plaintiff’s amended complaint, “Stable Diffusion was trained . . . from Datasets prepared by non-party LAION, a German entity…”. Getty also does not allege that Stability AI Ltd. “contracted to supply services or things in Delaware,” per Stability AI.
Jan. 13, 2023: Andersen, et al. v. Stability AI LTD., et al.
Stability AI was named in a copyright infringement, unfair competition, and right-of-publicity lawsuit in January 2023, along with fellow defendants DeviantArt and Midjourney. In furtherance of the lawsuit, a trio of artists is accusing Stability AI and co. of engaging in “blatant and enormous infringement” by using their artworks – without authorization – to enable AI-image generators, including Stable Diffusion, to create what are being characterized as “new” images but what are really “infringing derivative works.”
The defendants have pushed back against the suit, with Stability AI arguing this spring that while Stable Diffusion was “trained on billions of images that were publicly available on the Internet … training a model does not mean copying or memorizing images for later distribution. Indeed, Stable Diffusion does not ‘store’ any images.” Meanwhile, in a filing of its own in April, text-to-image generator DeviantArt urged the court to toss out the claims against it and to strike the right-of-publicity claims lodged against it, as they “largely concern the potential for DreamUp to create art,” which falls neatly within the bounds of free speech. As such, the Los Angeles-based online art (and AI) platform says that the plaintiffs’ claims should be barred by California’s anti-SLAPP statute.
May 6, 2020: Thomson Reuters Enterprise Centre GmbH et al v. ROSS Intelligence Inc.
In an early generative AI-centric case, Thomson Reuters alleges that ROSS copied the entirety of its Westlaw database (after having been denied a license) to use as training data for its competing generative AI-powered legal research platform. Reuters’ complaint survived a motion to dismiss in 2021. Fast forward to the summary judgement phase, and ROSS has argued, in part, that its unauthorized copying/use of the Westlaw database amounts to fair use. Specifically, ROSS claims that it took only “unprotected ideas and facts about the text” in order to train its model; that its “purpose” in doing so was to “write entirely original and new code” for its generative AI-powered search tool; and that there is no market for the allegedly infringed Westlaw content consisting of headnotes and key numbers.
*This article was initially published on June 5, and has been updated to reflect newly-filed lawsuits and updates in previously-reported cases.
A recent case development worth noting: The Regional Court of Düsseldorf held that an Amazon European entity is liable for design infringement and issued a preliminary injunction against an arm of the retail behemoth on the basis that the standards set by the Court of Justice of the European Union (“CJEU”) in a string of Christian Louboutin-initiated trademark cases can also be applied in the Community design law context. The German court’s August 21, 2023 decision is the latest round in a platform liability-centric lawsuit that Louboutin waged against Amazon over its sale and advertising of allegedly infringing red soled shoes on its marketplace platform.
Some Background: Louboutin previously waged separate trademark cases against Amazon in Belgium and Luxembourg in 2019 (cases C-148/21 and C-184/21), arguing that Amazon should be held directly liable for trademark infringement as a result of the presence of third-party listings for infringing goods on its platform. Amazon argued in response that it should be shielded from liability, since as the operator of an online marketplace comprised largely of third party-offered products, it does not “use” the trademarks at issue. Louboutin disagreed, asserting that traditional online marketplace principles are not applicable to Amazon due to its hybrid operator marketplace model, which sees it offer up and advertise its own products and those of third parties. Against that background, the French footwear company argued that Amazon should be considered a distributor of the goods sold on its platform and the advertisements for third-party sellers’ goods on the Amazon site should be considered part of Amazon’s own commercial communications.
Both courts had sought guidance from the CJEU on whether an online marketplace could be held directly liable for trademark infringement (under Article 9(2) of the EUTMR) for: (1) displaying advertisements for sellers that are using third-party trademarks (Louboutin’s in this case) without authorization, and (2) stocking and delivering the sellers’ infringing goods to customers. At the heart of the referrals to the CJEU was essentially the question of what “use” as a trademark looks like for infringement purposes when it comes to online marketplace platforms.
In a decision in December 2022, the CJEU held that a marketplace operator like Amazon can be found directly liable for trademark infringement if a reasonable consumer could establish a link between the trademark at issue and the services of the online marketplace. Put another way, a marketplace operator can be considered to be using a trademark by way of advertisements, if those ads are likely to cause a reasonable consumer to believe that the marketplace operator is marketing the trademark-bearing goods on its own behalf rather than for the third-party.
In the combined cases, the CJEU noted that Amazon consistently presented advertisements for the allegedly infringing shoes on its e-commerce site using its own logo, which could lead consumers to believe that the shoes were being marketed and by Amazon. Moreover, the court was persuaded by the fact that in addition to presenting its own products alongside those of third-party sellers on its site (and not distinguishing between them), Amazon provides additional services to third-party sellers – including handling customer service inquiries and facilitating customer returns – thereby, contributing to the appearance of a link between Amazon and the third-party products available on its site.
> Amazon v. Coty: This was not the first time that the CJEU determined whether online marketplaces can be directly liable for trademark infringements of third parties using their marketplaces. In the Amazon v. Coty case, the CJEU held in April 2020 that Amazon could not be liable for the infringement of Coty’s Davidoff trademark, which was being used in connection with the unauthorized sale – and shipment – of perfumes by a third-party seller via the Amazon marketplace. The court sided with Amazon in a decision that largely centered on the fact that the infringing perfume products were shipped directly by the seller and not by Amazon.
Design Law & Platform Liability
“Taking into account the principles established by the CJEU [in the previously-decided Louboutin cases],” the Regional Court of Düsseldorf determined last month that it is “clear” in the case at hand (No. 14c O 67/23) that Amazon used the design at issue – Louboutin’s red soled shoes – “within the meaning of Article 19(1).” (That provision states that “a registered Community design shall confer on its holder the exclusive right to use it and to prevent any third party not having his consent from using it.”)
Addressing the potential for platform liability for “illegal third-party content in trademark and design law,” the court stated that “the possibility developed by the CJEU of being directly liable for an infringement if the relevant public attributes the use of the trademark to the platform operator can also be transferred to [the] design law [context]. Because here, too, it can be argued that those who generate themselves like the user must also be [held] responsible.”
The Bigger Picture: LÖFFEL ABRAR Rechtsanwälte PartG mbB partner Oliver Löffel says that is that the Düsseldorf regional court’s decision is very likely the first that applies/extends the CJEU Louboutin standards beyond the trademark context to design law. But more than that, the decision seems as though it may be an indication that courts are willing to use the CJEU’s determination in the Louboutin cases broadly, an outcome that brands’ counsels have been hoping for, particularly in the wake of what has been viewed as a particularly disappointing outcome for brands in Amazon v. Coty.
The International Trade Commission (“ITC”) has terminated an investigation centering on footwear that allegedly infringes Crocs well-known foam clogs. On the heels of Crocs filing a complaint with the ITC in 2021, alleging that more than 20 companies – including Skechers, Walmart, Hobby Lobby, and Loeffler Randall – were violating section 337 of the Tariff Act by unlawfully importing and/or selling footwear that infringes its federal registered trademarks, the U.S. trade regulator found no violations by any of the companies that had not yet settled with Crocs. Siding with Crocs to an extent, the ITC issued limited exclusion orders, blocking the defaulting companies from importing, selling, marketing, and distributing the allegedly infringing footwear.
In a notice dated September 14, as first reported by TFL, the ITC stated that it had determined that despite Crocs’ claims, Hobby Lobby Stores, Inc. (“Hobby Lobby”), Quanzhou ZhengDe Network Corp. d/b/a Amoji (“Amoji”), and Orly Shoe Corp. (“Orly”) had not violated section 337 of the Tariff Act. (Section 337 prohibits unfair methods of competition and unfair acts in the importation of articles into the U.S.)
In the complaint that it filed with the ITC in June 2021, Crocs argued that while there is a “virtually infinite number of different, non-infringing footwear styles in existence today,” and there is a lack “any actual competitive need to use the Crocs marks in commerce,” a number of competitors had taken to “intentionally and frequently” replicating its “unique and recognizable” footwear. The “copycat” products are “not due to competitive need,” Colorado-based Crocs claimed, “but because of the significant goodwill that the Crocs marks have accumulated over the past two decades during their use by Crocs.”
Against that background, Crocs alleged that the companies had been importing footwear that infringed and/pr diluted “one or more” of its trademark registrations (Reg. Nos. 3,836,415; 5,149,328; and 5,273,875), which cover the CROCS word mark, as well as the “three-dimensional configuration” of its foam clog upper design (the “3D Marks”). Crocs also argued that the almost-two-dozen footwear companies were engaging in false designation of origin.
For a bit of background: The ITC instituted an investigation in July 2021 in response to Crocs’ complaint, and subsequently terminated the investigation with respect to the bulk of the respondents – including Skechers, Cape Robbin, Wild Diva, Loeffler Randall, and Walmart, among others – on the basis of settlement agreements or consent orders.
Following an evidentiary hearing, the ITC’s administrative law judge (“ALJ”) issued an initial determination (“ID”) in January, finding no violation of section 337 because Crocs did not prove that the respondents infringed or diluted the trademarks at issue, or that the respondents falsely designated the origin of their accused products or caused unfair competition. Beyond that, the ALJ found that Crocs’ registrations for the 3D Marks (namely, Reg. Nos. 5,149,328 and 5,273,875) are “invalid for lack of secondary meaning.”
The 3D Marks & Secondary Meaning: Addressing the 3D Marks, in particular, the ALJ stated in the ID that Crocs “has not continuously and consistently promoted the 3D Marks in its advertisements.” The ALJ found that the evidence produced by Crocs “also shows that, contrary to Crocs’ assertions, the 3D Marks do not always appear, and certainly do not always prominently appear, in Crocs’ advertisements. The exemplary advertisements also show that the 3D Marks are not visible at virtually any angle. All of this makes it unlikely that Crocs’ advertisements created a mental association in the minds of consumers such that they identify the 3D Marks with Crocs.”
In a partial victory for Crocs, the ALJ found that the respondents had failed to prove that the trademark registrations for the 3D Marks are invalid as functional or that the CROCS word mark is invalid as generic. And finally, the ALJ did not take a position onCrocs’s alleged injury or the respondents’ fair use defense in its ID.
In April, the Commission revealed that it would review various aspects of the ID, including the findings that: (1) Crocs waived its infringement contentions against the lined version of Orly’s Gators; (2) the 3D Marks are not entitled to the presumption of validity and are invalid for lack of secondary meaning; (3) Crocs waived its infringement contentions against the defaulting respondents; (4) subject matter jurisdiction; (5) likelihood of confusion; (6) false designation of origin; (7) dilution; and (8) the technical and economic prongs of domestic industry.
The Commission’s Decision – Fast forward to last week and having reviewed the ID, the parties’ submissions, and the evidence of record, the Commission “affirm[ed] and adopt[ed] the ID’s findings that the respondents have not infringed or diluted any of the asserted marks, falsely designated the origin of their [allegedly infringing] products or engaged in unfair competition.” At the same time, the Commission reversed the ID’s finding that Crocs waived its infringement contentions with respect to certain versions of Orly’s clogs (its lined Gator shoes), and found, instead, that Crocs failed to prove that Orly’s Gator footwear amounted to infringement.
The Commission has further issued a limited exclusion order against the defaulting respondents, La Modish Boutique, Star Bay Group Inc., Huizhou Xinshunzu Shoes Co., Ltd., and Jinjiang Anao Footwear Co., Ltd.
The ITC proceeding is only part of the picture, however, as in July 2021, Crocs filed separate – but related – trademark lawsuits against many of these same companies, including Walmart, Loeffler Randall, and Hobby Lobby Stores. Since no monetary damages are available at the ITC, in order for companies to have a chance at obtaining both injunctive relief (in the form of exclusion and cease-and-desist orders) and monetary damages, they need to initiate proceedings before the ITC and a district court, making it common for companies to pursue litigation in tandem with the ITC proceedings.
One of the longest-lasting of those suits, which saw Crocs wage trademark claims against Walmart in the U.S. District Court for the District of Colorado, settled in September 2022.
The case is In the Matter of Certain: Casual Footwear and Packaging Thereof, No. 337-TA-1270.
