Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.
1. The shipment of a substantial amount of counterfeit goods through e-commerce platforms is not new or newsworthy. Efforts by e-commerce platforms have been made as a means to attempt to stem the tide of counterfeit goods. That said, the counterfeiters are crafty, and if they pay their fees and a sales percentage to the platforms, the platforms may not be as aggressive as some may like to stop the counterfeiting problem. Can Congress come to the rescue? Perish the thought in these divided, partisan times? Maybe not. At least three bi-partisan, anti-counterfeiting bills are pending in Congress, and have their typically goofy acronym names: (1) the SHOP SAFE Act; (2) the SANTA Act; and, the INFORM Act. The bills would potentially place more liability on e-commerce platforms that do not sufficiently address counterfeiting concerns, would require more detailed disclosures of the seller’s identities (in one bill based on the types of products sold, and in another based on the seller’s volume of sales on the platform). Whether these bills go anywhere remains to be seen, but it seems that there are some reasonable provisions that could help curb sales of counterfeit products.
2. In a recent decision from the Southern District of California, the Court dismissed with leave to amend a Defend Trade Secrets Act misappropriation claim for failing to identify the trade secret with sufficient detail and specificity. The plaintiff pled a contract, which contemplated the exchange of confidential information, and an assertion related to the development and design of a sock that provides arch support. The genesis of the dispute is that the defendant originally sold the sock designed by plaintiff, but later, allegedly switched vendors and shared the design information with the different vendor. The takeaway here is that trade secret claims under federal or California law need to specifically identify the alleged trade secret. Vague, high-level descriptions of the trade secret will likely result in dismissals.
3. In a recent order from the Southern District of Illinois, the district judge denied the defendants’ motion for summary judgment on a copyright infringement claim related to tattoos that the plaintiff inked onto wrestler Randy Orton, and the tattoos were admittedly copied into a WWE video game featuring Orton. The district court upheld the copyrightability of the tattoos as a creative work, and also rejected a de minimis defense that the tattoos were a very minor element of the overall video game where the entirety of the copyrighted works were copied. The defendants argued that the plaintiff granted an implied license to Orton by never instructing him not to further use the tattoos (other than on his body, and the plaintiff said she never authorized further use. Thus, the implied license issue is headed for trial. Finally, the district court denied summary judgment on the fair use defense finding a number of factual issues, including the purpose and character of the use, the extent of copying, and effects on the market. The interesting takeaway here is that body art can be copyrightable, and that artists and bearers of body art should agree in advance on whether further dissemination or use of the art is permissible.