Posts Tagged: "first sale doctrine"

The Implications of Upcycled Products for Brand and Trademark Owners

Upcycling, a recent fashion trend, poses issues and concerns for brand owners that are similar to counterfeiting but with some added complexity. As a result, upcycled products have prompted brand owners to take legal action to protect their brands and consequently their customers. Below, we (1) explain what upcycling is, (2) discuss potential legal issues arising from upcycled products, (3) summarize recent cases involving upcycled products, and (4) propose successful brand protection measures.

The Quixotic Battle Over Controlled Digital Lending Heats Up

In June 2020, a few months into the pandemic, a group of four large publishing houses—Hachette Book Group, HarperCollins Publishers, John Wiley & Sons, and Penguin Random House (collectively, the Publishers)—sued Internet Archive (IA) in the Southern District of New York for “willful mass copyright infringement.” The spat centers around IA’s Open Library project, which scans millions of physical books and delivers them digitally across the globe for free to anyone with an internet connection. IA proclaims that the “ultimate goal of the Open Library is to make all the published works of humankind available to everyone in the world,” but it conspicuously fails to mention that its utopian vision doesn’t include getting permission from copyright owners before offering their works on its virtual bookshelves. IA argues before the court that it doesn’t need permission because its actions qualify as fair use under the dubious new theory of controlled digital lending (CDL), which it claims to be “fundamentally the same as traditional library lending” since it “poses no new harm to authors or the publishing industry.”

Upcycled Goods: Considering When Restoration Crosses into Infringement

Two recent decisions dealing with high-end watches illustrate the fine line between permissible and infringing modifications when the final product bears a trademark of the original maker. As the trend of “upcycling” or “creative reuse” continues to grow, entrepreneurs should be aware of the potential pitfalls in modifying the products of others. Generally, the first sale or “exhaustion” doctrine protects a reseller of authentic goods from infringement liability—but only when the goods have not been materially altered in any manner and meet the trademark owner’s quality standards. There are, however, some circumstances where courts have found certain modifications to be permissible.

State Compulsory eBook and Audiobook Licensing Is Wrong on Law and Policy

The ability of copyright owners to experiment with different marketing strategies is fundamental to copyright law. Indeed, the U.S. Copyright Act promotes the public good by granting exclusive rights to copyright owners that incentivize the creation and dissemination of new works on their own terms. These exclusive rights are the reason why copyright owners invest time, energy, and money into creating new works, and why they have a chance to recoup expenses and perhaps make a profit. The Copyright Act has always celebrated the right and ability of copyright owners to choose whether, how, when, and where their works are distributed to the public. And under our dual system of government, where federal law reigns supreme, it is well-settled that the states are powerless to interfere in ways that conflict with the nationwide scheme established by Congress. Nevertheless, there is an alarming new trend of states pursuing laws that would force publishers, many of whom are also authors, to grant licenses to public libraries for access to their digital works, such as eBooks and audiobooks.

Satan Shoes: Trademark Blasphemy or Free Speech?

Though the parties have quickly settled their case, the question remains open: was Lil Nas X’s “Satan Shoe” an exercise of free speech or a trademark violation? What we do know is that sneaker giant Nike’s complaint filed in the Eastern District of New York on March 29, 2021 alleged a dispute of biblical proportions against Brooklyn art collective MSCHF Product Studio, Inc. Nike targeted its own Air Max 97 shoe, which it claimed MSCHF and its collaborator Lil Nas X (who was not named in the lawsuit) materially altered to feature an upside down cross, a pentagram, and an injection of human blood into the sole to create the “Satan Shoe” – 666 of them to be exact. The Satan Shoe still displays Nike’s famous Swoosh, which inspired calls to boycott the brand for its alleged association with the controversial shoes. Nike asserted claims of trademark infringement, trademark dilution, false designation of origin, and unfair competition, and sought a temporary restraining order, a permanent injunction, and damages.