Trouble on the Beach

By: Drew Carlson

This June, Jacksonville Florida will host the Orange Crush Festival. However, some businesses may be celebrating it not with festivities, but with a lawsuit.

The “‘culturally historic’ festival is a loosely organized three-day beach weekend that draws a largely Black college-age crowd.” The festival has already been held in Miami as well as Tybee Island this year, and is scheduled to be held in Miami again on May 24-27 and in Jacksonville on June 11-14. During these festivals many businesses often host their own Orange Crush themed events, but due to trademark law, their free-riding may soon come to a sudden stop.

The name “Orange Crush Festival” is trademarked by George Ransom Turner III. On April 15, George Turner sent out five cease-and-desist letters ordering people and businesses to stop using his trademark. According to Turner, this action was necessary because of the damage these unofficial festival events have wrought on both his personal and company’s reputation. 

Turner considers these businesses “piggyback promoters” and claims that his business has been blamed for their problems. In a recent interview Turner said that, “[t]he negative media and the negative backlash and all of the things that went really bad last year on the beach that I was nowhere near and had nothing to do with my brand and my personal name and my likeness and all of the above still takes a major hit.”

In fact, he claims that he will never hold another Orange Crush Festival in Georgia again due to these issues. 

Strength of the Trademark

Trademarks are “a form of intellectual property that serve to identify the sources of goods.” They also “promise a consistent level of quality, whether it be good or bad.” By protecting the means sellers use to identify their goods, they protect both sellers and buyers. Buyers are protected from unscrupulous sellers tricking them into buying counterfeit goods, while sellers’ are protected from their reputations being sullied by the actions of others.

Infringement occurs when one good is likely to be confused with another. For example, a store selling “Apple” branded fruit is fine because it is not likely to be confused with the computer manufacturer. Meanwhile, “Apple” branded televisions are similar enough to computers that many people would likely confuse them for products by Apple Computers. Therefore, “Apple” Televisions would likely infringe on Apple’s trademarks.

Trademarks are “protectable only if they are distinctive [and]…are judged on a spectrum of distinctiveness; arbitrary and fanciful trademarks are considered to be the most distinctive.” Arbitrary and fanciful marks have nothing to do with the goods sold, similar to how the trademark Apple has nothing to do with actual fruit.  Suggestive marks suggest the goods, but the consumer still needs to use their imagination to figure out what the good is, like the airplane manufacturer Airbus. Descriptive marks describe the specific goods sold and they are weaker than the above categories, since they only describe the product. After all, many makers of similar products might describe their marks in similar ways. Therefore, consumers must associate the descriptive mark with the product for it to gain protection. Finally, the last level of distinctiveness are generic marks which describe a general class of goods and are therefore not protected by trademarks.

The Orange Crush Festival is an arbitrary mark because it does not describe, nor even suggest, a beachside festival. T This lack of direct association with the event’s theme enhances the distinctiveness of the mark, offering it robust protection under trademark law. Consequently, Mr. Turner’s rights to this festival name are exceptionally strong.

Due to this distinctiveness, other people or businesses using the name “Orange Crush Festival” for their events are very likely to confuse people. Since the name is clearly that of Mr. Turner’s festival, anyone else using it implies a connection to Mr. Turner. 

Not only are people likely to be confused, but, based on Mr. Turner’s comments, many already have been. His reputational problems stem from events he had no involvement with piggybacking on his good will. Once they are done, he is left to piggyback on the consequences of their actions.
Incidents like this underscore why trademark law exists. Mr. Turner is not suing for the fun of it. He is suing to protect his brand’s goodwill. Festival goers will also benefit from this because it will allowMr. Turner and those he authorizes to use the name, to ensure a quality experience at his standards. . Festival-goers deserve to know what sort of event they are getting when they go to the Orange Crush Festival, whether it meets or falls short of their expectations.

Your Squishmallow Isn’t Who You Think It Is: Setting The Bounds Of The Soft Toy Market

Photo by Pixabay on Pexels.com

By: Caroline Dolan

Squishmallows were introduced in 2017 and went viral on TikTok and Instagram during the Covid-19 pandemic in 2021. People fell in love with these affordable and huggable plushies that are available in more than 3,000 different characters. Their unique sizes and colors provide comfort and joy for all ages and even serve a niche of Squishmallow collectors. 

Trade Dress: The Look and Feel

Trademarks are “words, names, symbols, or devices” that are distinct, functional, and used in commerce to identify the source of a good. The Lanham Act provides federal protection over the good-will of such artistic creations from infringement, dilution, cybersquatting, and false advertising. It also protects consumers from being deceived by knock-off products. The Lanham Act also protects a product’s trade dress, which is “the commercial look and feel of a product or service that identifies and distinguishes the source of the product or service.” Similar to trademarks, trade dress can receive protection even without formal registration with the U.S. Patent and Trademark Office.  

To assert a trade dress infringement claim, a plaintiff must demonstrate that their product’s trade dress  (1) is distinctive; (2) is owned by the plaintiff; (3) is nonfunctional; and (4) that the defendant used the trade dress without consent in a way that is likely to confuse the ordinary consumer as to the source, sponsorship, or affiliation of the product. The Ninth Circuit has held that a trade dress that fails to be inherently distinctive may still be protected if it possesses a secondary meaning. To show a secondary meaning, a plaintiff must prove “a mental recognition in buyers’ and potential buyers’ minds that products connected with the [trade dress] are associated with the same source.” 

Build-A-Bear vs. Squishmallow

Warren Buffet’s investment company, Berkshire Hathaway, owns Alleghany Corporation which is the parent company of Jazwares LLC. Jazwares oversees Kelly Toys which is a leading toy manufacturer and the creator of Squishmallows. Squishmallows have seen its sales boom since 2021 and can be purchased in a variety of spaces, including in bulk at your local Costco. However, in January 2024, to offer “optimal hugging benefits” in light of Valentine’s Day, Build-A-Bear launched its Skoosherz line—a variety of collectible plush pillow-like toys. 

Once the Sckoosherz line was released, Kelly Toys promptly filed a lawsuit in the Central District of California claiming that Build-A-Bear’s Skoosherz line infringes on Squishmallow’s trade dress because Skoosherz imitate Squishmallows’ “shape, face style, coloring and fabric.” Kelly Toys’ complaint alleges that Skoosherz “have the same distinctive trade dress as the popular Squishmallows, including: shaped fanciful renditions of animals/characters; simplified Asian style Kawaii faces; embroidered facial features; distinctive and nonmonochrome coloring; and velvety velour-like textured exterior.” It asserts that these similarities seek to “trick consumers” and has harmed the Squishmallows brand by “divert[ing] sales and profits from Kelly Toys to Build-A-Bear.” Kelly Toys is seeking unspecified damages and an injunction to stop the sale of Skoosherz. In Kelly Toys’ view, Build-A-Bear is intentionally copying the distinct physical characteristics and exterior appearance of Squishmallows to capitalize on Squishmallows’ international success.

Build-A-Bear has responded by filing its own complaint in the Eastern District of Missouri asserting that its Skoosherz line is merely an extension of its already existing line of animal toys. In Build-A-Bear’s view, Skoosherz merely imitates the popular plushies that Build-a-Bear has previously sold. For instance, Build-A-Bear claims that the Skoosherz Pink Axåolotl is merely an imitation of its original Pink Axolotl toy. The company is seeking a declaratory judgment stating that Skoosherz do not infringe on the Squishmallow trade dress and furthermore, that the Squishmallow trade dress is not even protectable under the Lanham Act. Build-A-Bear asserts that the Squishmallow trade dress lacks a consistent look and feel and shares characteristics with toys already present in the market. According to its complaint, “[i]f each aspect of the claimed trade dress were in fact protected trade dress, it would be virtually impossible for competitors to create alternative designs.”

Bearing a Squishy Future

Trade dress is a critical element of trademark law and serves to safeguard the goodwill of creators, the protection of consumers, and a competitive market. Although this dispute resides in the market of soft toys, it highlights a new perspective of trade dress law and application. If a jury trial is granted, Kelly Toys will likely rely on side-by-side comparisons to highlight the visual similarities between Squishmallows and Skoosherz as well as present consumer comments that have been made on Build-a-Bear’s social media account dubbing Skoosherz as “knockoff Squishmallows.” Although such evidence can support Kelly Toys’ infringement claims, it will still have the initial burden of proving that its trade dress is protectable.

Next on the Chopping Block? The Legal War Over the ACC

By: Patrick Paulsen

The world of college sports is constantly changing. With the rise of name, image, and likeness (“NIL”), direct payment of players, and licensing in video games, the world of college athletics is a hotbed of legal activity. In addition, massive TV rights deals have caused seismic shifts in college sports, including the demise of the Pac-12. Much is at stake and even more is in flux, so it is no surprise that a new battle is emerging over another major college sports conference: the Atlantic Coast Conference (“ACC”). 

The Latest Conference Shift in College Football

Two of the ACC’s member schools, Florida State University and Clemson University, have engaged in legal battles to potentially leave the conference. Although Florida State’s snubbing from last season’s College Football Playoff was likely the straw that broke the camel’s back, the true motivating factor, as with the demise of Pac-12, appears to be money. “ACC members make roughly $30 million less per year than schools in the Big-10 and SEC.” As with other conferences, the ACC is held together by its grant of rights, an agreement whereby its member schools transfer their media rights to the conference to negotiate media deals collectively on their behalf. 

The ACC’s grant of rights is at the root of this legal battle and is why this conference’s potential breakup differs considerably from the Pac-12 or Big-12 realignments. The ACC’s grant of rights functions to protect the conference from realignment by providing the conference with each school’s media rights through 2036. In addition, the ACC’s constitution imposes a hefty exit fee, around $130 million for Florida State. Compared to other conferences such as the Pac-12 (whose grant of rights expires in August) or the Big-12 (whose exit fee is approximately $50 million), these hurdles to exit are substantial. Florida State estimates their total exit cost at around  $572 million to leave the ACC, hence the current litigation. 

The ACC and Florida State Litigation

This legal saga began in earnest on December 21^st, 2023 when the ACC preemptively sued Florida State, likely to maintain the action in North Carolina State Court rather than a Florida court. Florida State’s Board of Trustees sued the ACC the following day, before the news of the ACC’s suit became public. The amended complaint filed by the ACC seeks “a declaration that Florida State is equitably estopped from challenging the validity or enforceability of the grant of rights” along with injunctive relief requiring Florida State to uphold its obligations to the conference and their agreements. 

Florida State’s lawsuit argues several legal theories, notably that the grant of rights is unenforceable as an “unreasonable restraint of trade” under Florida Statute 542.18, that the exit fees are unenforceable penalties due to being unconscionable and contrary to public policy, and that the ACC materially breached its fiduciary duties and contracts with Florida State. Florida Statute 542.18 is an antitrust that has recently been utilized to the benefit of Florida based firms outside the realm of sports.

The jurisdiction of these suits is likely as important as the claims. These differing lawsuits filed in differing state courts create hard to resolve issues, such as the battle over trade-secrets, when the controversy is viewed in totum. 

These lawsuits have clear third-party impacts: ESPN filed a motion in the North Carolina litigation supporting the ACC, alleging that Florida State’s attorneys may have “committed a felony by knowingly disclosing ESPN’s trade secrets.” Florida State’s filings contained non-public details from the media agreements between the ACC and ESPN. Meanwhile, in Florida, the Attorney General sued the ACC for refusing to publicly disclose the same agreements, claiming that under Florida law, they constitute public records due to the involvement of a government entity (Florida State University). 

Clemson Joins the Fray

In addition to the two lawsuits battling Florida State, Clemson University brought suit against the ACC. In what has been called a “pincer attack,” the Clemson lawsuit attacks the ACC’s exposed flank by picking up legal theories which fill the gaps left by the Florida State claims. Clemson’s suit embodies two main legal theories. The first is that § 1.4.5 of the ACC’s Constitution, which imposes an exit fee “equal to three times the total operating budget” of the conference (approximately $140 million), is unenforceable as it constitutes a “financial penalty” that is “unconscionable” and “against public policy.” The second theory claims that the conveyance of media rights in the ACC’s grant of rights should be interpreted to encompass only the rights to athletic events which occurred during a member university’s tenure as a member. 

Clemson argues that the exit fee for the conference has “ballooned to a point that was unimaginable in 2012, and is unconscionable, unenforceable, and in violation of public policy . . . .” Clemson is arguing that the common interpretation of the grant of rights is incorrect, and that instead of a blanket grant of media rights, the grant of rights is limited to those rights which are “necessary for the Conference to perform the contractual obligations of the Conference expressly set forth in the ESPN Agreement.” Clemson claims that this phrase makes the grant narrower than commonly believed, by limiting their conveyance of rights only to events which occur while they are members of the ACC, and not for the length of the agreement, regardless of conference affiliation. 

If successful on these points, Clemson’s cost of leaving the ACC would drop from around $572 million to somewhere around the $30-50 million that other conferences require. With so much at stake, the future of the ACC is unclear; however, there are some clues to what may happens next.

Can a Solution Be Found?

With three different lawsuits in as many states, each concerning particular state law claims, the chances of suits being removed and consolidated to federal court are low for the immediate future. Because each party is hoping for a “home court advantage” in their respective jurisdictions, neither side is motivated to consolidate to a neutral forum. In addition, Florida State is invoking sovereign immunity to argue a North Carolina court does not have jurisdiction. This, and other maneuvers, such as appeals and various procedural motions, will likely keep the cases open in each jurisdiction until a final judgment is reached on a  given issue. A favorable ruling to a party would allow one side to argue, based on the “full faith and credit” clause of the Constitution, that other states must accept their ruling. Should each side find favorable rulings in their home state, all bets are off as to how the “full faith and credit” clause will be interpreted to untangle everything, and resolution by the U.S. Supreme Court enters the realm of possibility. 

Due to court cases likely taking years to play out, and with the August 15^th deadline to withdraw from the conference for the 2025-26 season approaching, there is a high incentive to settle or mediate outside of the courts. However, the perfect solution may be hard to determine with hundreds of million dollars at stake. How motivated to leave the ACC are Florida State and/or Clemson? How much are schools such as Florida State willing to pay to escape the ACC? As early as last August, Florida State initiated discussions with JP Morgan regarding raising the necessary exit fees through private investment. Other ACC member schools, such as North Carolina, are rumored to have interest in leaving the conference. There may be as little predictability in a settlement as there would be with these cases proceeding to trial. 

Conclusion

The merits of these cases have yet to be evaluated in each jurisdiction, so the sports and legal worlds will have to wait. Should settlements fail, any court decision will change the landscape of the ACC and the fortunes of its member universities by hundreds of millions of dollars. The docket watching may prove to be as exciting as any ACC athletic event, as all interested parties await even more shock waves through the dynamic world of college athletics.

AI’s Creative Ambitions: A Case Review of Thaler v. Perlmutter (2023)

By: Stella B. Haynes Kiehn

Is it possible for AI to achieve genuine creativity?  Inventor and self-dubbed “AI Director”, Dr. Stephen Thaler (“Thaler”), has been attempting to prove to the U.S. Copyright Office for the past several years that not only can AI be creative, but also that AI can create works capable of reaching copyright standards.

On November 3, 2018, Thaler filed an application to register a copyright claim for the work, A Recent Entrance to Paradise. While Thaler filed the application, Thaler listed “The Creativity Machine”, as the author of the work, and himself as the copyright claimant. According to Thaler, A Recent Entrance to Paradise was drawn and named by the Creativity Machine, an AI program. The artwork “depicts a three-track railway heading into what appears to be a leafy, partly pixelated tunnel.” In Thaler’s copyright application, he noted that A Recent Entrance to Paradise “was autonomously created by a computer algorithm running on a machine” and he was “seeking to register this computer-generated work as a work-for-hire to the owner of the Creativity Machine.”

The U.S. Copyright Office denied Thaler’s application primarily on the grounds that his work lacked the human authorship necessary to support a copyright claim. On a second request for reconsideration of refusal, “Thaler did not assert that the Work was created with contribution from a human author … [but that] the Office’s human authorship requirement is unconstitutional and unsupported by case law.” The U.S. Copyright Office once again denied the application. Upon receiving this decision, Thaler appealed the ruling to the U.S. District Court for the District of Columbia.

On appeal, Judge Beryl A. Howell reiterated that “human authorship is an essential part of a valid copyright claim.” Notably, Section 101 of the Copyright Act requires that a work have an “author” to be eligible for copyright. Drawing upon decades of Supreme Court case law, the Court concluded that the author must be human, for three primary reasons.

First, the Court stated that the government adopted the Copyright Clause of the U.S. Constitution to incentivize the creation of uniquely original works of authorship. This incentivization is often financial, and non-human actors, unlike human authors, do not require financial incentives to create. “Copyright was therefore not designed to reach” artificial intelligence systems.

Second, the Court pointed to the legislative history of the Copyright Act of 1976 as evidence against Thaler’s copyright claim. The Court looked to the Copyright Act of 1909’s provision that only a “person” could “secure copyright” for a work. Additionally, the Court found that the legislative history of the Copyright Act of 1976 fails to indicate that Congress intended to extend authorship to nonhuman actors, such as AI. To the contrary, the congressional reports stated that Congress sought to incorporate the “original work of authorship” standard “without change.”

Finally, the Court noted that case law has “consistently recognized” the human authorship requirement. The decision pointed to the U.S. Supreme Court’s 1884 opinion in Burrow-Giles Lithographic Company v. Sarony, in upholding the constitutionality of the human only authorship requirement. This case, upholding authorship rights for photographers, found it significant that the human creator, not the camera, “conceived of and designed the image and then used the camera to capture the image.”

Ultimately, this decision is consistent with recent case law, and administrative opinions on this topic. In mid 2024, the Copyright Office plans to issue guidance on AI and copyright issues, in response to a survey of AI industry professionals, copyright applicants, and legal professionals. In relation to the Creativity Machine, one of Thaler’s main supporters in this legal battle is Ryan Abbott, a professor of law and health sciences at the University of Surrey in the UK, and a prominent AI litigant. Abbott is the creator of the Artificial Inventor Project—a group of intellectual property lawyers and an AI scientist working on IP rights for AI-generated outputs. The Artificial Inventor Project is currently working on several other cases for Thaler, including attempting to patent two of the Creativity Machine’s other “authored” works. While the District Court’s decision seems to mark the end of Thaler’s quest to copyright A Recent Entrance to Paradise, it seems as if the fight for AI authorship rights in copyright is only beginning.

SFO v. OAK

Understanding the Bay Area’s Newest Trademark Battle

By: Anushka Parihar

The San Francisco Bay Area is one of California’s most visited tourist destinations. Millions of visitors a year fly into San Francisco International Airport (SFO) and Oakland International Airport (OAK) to experience the Bay Area’s diverse culture, beautiful landscapes, and innovative spirit. 

Between 2019-2023, travel to Oakland decreased by nearly 2 million people, which the OAK attributes to the Covid-19 pandemic. In response, OAK has launched an advertising campaign intended to increase tourism, including a proposition to rename Oakland International Airport to “San Francisco Bay Oakland International Airport.” However, the City of San Francisco argues that this campaign, along with the OAK’s proposed name change, closely resembles SFO’s trademarked name and themes. These efforts, San Francisco claims, create confusion amongst travelers, leading them to believe that the Oakland and San Francisco airports are the same entity. 

San Francisco City Attorney David Chiu filed suit against Oakland, alleging that OAK’s new name infringes on San Francisco’s registered trademark. The suit seeks an injunction against Oakland and its associated partners, such as airlines, rental cars companies, and travel agencies, to prevent them from using the disputed name. 

The Trademark Battle

Trademarks are words, phrases, symbols, designs, or a combination of these elements that identify goods or services. They are important in protecting a brand’s identity and ensuring consumers recognize brands in the marketplace. In this way, trademarks can be valuable marketing tools. Having a well-known trademark can draw in new customers and keep current customers loyal to the brand. Trademarks also offer clear and enforceable legal rights, allowing brands to block competitors from adopting similar marks that mislead customers. As such, trademark law prevents unfair competition which can be damaging to businesses. 

Trademark infringement occurs when there is an unauthorized use of a trademark that could lead to confusion, deception, or misunderstanding about the source of the good or service associated with the trademark. To successfully show that infringement occurred, the plaintiff must show that the alleged infringer’s infringing goods or services create a likelihood of confusion regarding the source. 

SFO argues that OAK’s renaming to “San Francisco Bay Area Oakland International Airport” would infringe on its trademark, “San Francisco International Airport.” They claim that their name is well-recognized and the new OAK name could confuse consumers as to which airport they are actually flying in or out of, particularly international travelers who are unfamiliar with the area. Consequently, SFO could lose travelers and business to OAK, which is 30 miles away from SFO. This could also inconvenience travelers expecting to be in San Francisco, who must now find their way across the Bay. 

Oakland may respond in a few different ways. They may try to show that there is no real likelihood of confusion. If they are able to show that consumers can distinguish between the two airports, perhaps through a survey, OAK could show that SFO’s claim lacks merit. They could also challenge the strength of SFO’s trademark by arguing that a geographically descriptive term should not have trademark protection. 

Possible Implications

If SFO prevails, they’d be able to reinforce the strength of their trademark and set a precedent about how geographic locations can be used for branding and source identification. OAK would then need to revert to their previous name and restructure their entire advertising campaign, which has already cost an estimated $150,000. 

Conversely, a favorable outcome for OAK could impact how geographical trademarks are used in brand identification, creating a precedent that using geographically descriptive names may not lead to trademark disputes. It would also allow Oakland to continue its marketing strategy and attract a larger customer base. Perhaps OAK could bring business back to the point that it was prior to the pandemic. 

Alternatively, this dispute might settle out of court, if both parties are able to negotiate the terms of use of the name or for financial compensation. This way, San Francisco and Oakland could avoid unnecessary litigation and expenses. 

This local issue might create larger implications for industries where identity and consumer perception are important. As this case progresses, businesses will undoubtedly be following the dispute to ensure their branding and marketing strategies are compliant with t