Do Process! November 2024
Ongoing IP for 2025
By Senta Johnson
As this year comes to a close, we eagerly look to 2025 for our courts to answer some pressing questions surrounding the ever-evolving IP realm. The outcomes of these ongoing cases below could significantly impact future trademark and copyright practices, and we advise you to keep a lookout!
Pennsylvania State University v. Vintage Brand, LLC
Prior to this case, the legal landscape surrounding trademark infringement claims involving merchandise or apparel was unclear. Circuit splits have issued conflicting decisions, creating uncertainty for colleges, universities, sports teams, and beyond on whether those trademark owners are entitled to prevent all third-party use of their marks on merchandise and apparel.
In June 2021, Pennsylvania State University filed a lawsuit against Vintage Brand LLC, accusing the company of willful trademark infringement for selling products bearing Penn State marks. While Vintage Brand concedes to selling products with Penn State trademarks, it claims that the use is merely ornamental, arguing that consumers buy university-branded merchandise to show support, not because they believe the university endorsed or sourced the products.
In a ruling earlier this year, the Middle District of PA issued a split decision on cross-motions for summary judgment. While agreeing that the Penn State trademarks at issue could be considered ornamental, the court also acknowledged that evidence suggests consumers may perceive them as indicating the source of the goods. It is an issue for the jury to decide.
The Penn State v. Vintage Brands case could significantly reshape the sports merchandising industry. The court’s summary judgment ruling indicates that trademark law doesn’t grant universities and sports teams exclusive rights over merchandise bearing their trademarks.
Jury selection has begun this week, and the worlds of sports and trademark law will be watching. At stake is whether sport marks can be used without consent to create unlicensed products. But also at play is whether teams can exclude others from using historical memorabilia that are already in the public domain, like old jerseys or game footage.
Authors Guild v. OpenAI & New York Times v. OpenAI
American courts are faced with the question of whether the unauthorized use of an author’s works to train an AI constitutes copyright infringement.
Two major actors sued OpenAI and Microsoft, particularly regarding their generative artificial intelligence platform, ChatGBT, in the Southern District of NY.
First, the New York Times filed a copyright infringement suit for the unpermitted use of Times articles to train ChatGPT models.The case could significantly impact how generative AI and copyright law intersect and could determine the future development of AI models.
OpenAI claimed both fair use and that The Times used “prompt hacking” to generate outputs to bolster their copyright claims. Open AI also questions the propriety of copyrightability of the underlying works at issue in the case.
As of July 2024, the Times suit already sparked controversy amidst a heated discovery phase resemblant of IP tug-of-war. OpenAI demanded access to reporter notes and behind-the-scenes materials for millions of articles, arguing that the necessity of such information to assess the copyrightability of The Times’ content. The Times countered that OpenAI’s requests undermine copyright law and intimidate news organizations. Further, the expressive character and copyrightability of its public articles is what should be evaluated, not the private notes or interview materials of their reporters.
The dispute highlights a key issue in the lawsuit: the extent to which plaintiffs must prove the copyrightability of individual works and the type of evidence allowed.
In the same wave, a class action suit of 17 authors seeking to protect their intellectual property sued the same Defendants. Although the authors show optimistic caution about current AI practices, the authors don’t oppose AI development itself. This case is rather about the unauthorized use of copyrighted material in training AI models.
When prompted, Chat GBT can produce detailed summaries, outlines, literary analyses, and potential sequels or side plots of published works. These results could not have happened without incorporating the author’s works into the database. The authors argue that their consent, licensing, or compensation should have been sought before using their copyrighted works.
Like in the Times case, OpenAI claimed that the method it has trained its databases constitutes as fair use and that Author’s Guild manipulated a series of written inputs into ChatGPT repeatedly to produce an output similar to the Authors’ works.
Both cases are ongoing and should be closely followed for their implications on the evolution of IP law.
Dewberry Engineers Inc. v. Dewberry Group, Inc.
Coming before the Supreme Court, this decades-long case explores the complexities of trademark infringement and corporate relationships. This dispute pits Dewberry Engineers, a nationwide civil engineering and surveying firm, against Dewberry Group, a real estate developer primarily operating in Southern U.S.. The controversy stems from conflicting claims to the use of the “Dewberry” name, a brand identity that both parties sought to protect and utilize in their respective fields.
The conflict intensified in 2006 when legal proceedings were initiated, resulting in a 2007 confidential settlement that outlined the terms for the use of the “DEWBERRY” mark.
In 2020, Dewberry Engineers rekindled the legal battle in Virginia, alleging breach of contract and trademark infringement by Dewberry Group. The district court rendered a judgment in favor of Dewberry Engineers, with a $43-million disgorgement of profits as an appropriate remedy.
Section 1117(a) of the Lanham Act provides that a prevailing plaintiff “shall be entitled . . . subject to the principles of equity, to recover (1) defendant’s profits” and that “[i]f the court shall find that the among of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case.”
Dewberry Group argued that the profit disgorgement was unfair because the infringing profits were earned by its separate, corporate affiliates, not by Dewberry Group itself. Dewberry Group claimed it received no direct profits from the infringement.The lower courts ruled that Dewberry Group and its affiliates should be treated as a single entity for profit calculation purposes.
The Supreme Court took the case for the ultimate question: Should the calculation of profits for damages under the Lanham Act extend to include corporate affiliates? This inquiry delves into the concept of “piercing the corporate veil,” a legal doctrine that challenges the separation between a corporation and its shareholders or affiliates in certain circumstances
SCOTUS perhaps sees this case as an opportunity to reinforce traditional principles of corporate separateness, or as an opportunity to weigh in the Lanham Act’s provision providing for disgorgement of an infringer’s profits. Either way, the role of corporate entities in IP Law is at stake.