Copyright Duration

My wife is a library student studying for her MLIS and concentrating on archives management. For her Introduction to Archival Methods and Services class (still not as boring as Civil Procedure), she completed a brief unit on copyright law. Because she and I are both losers and would rather spend our Friday night talking about her homework than doing literally anything else, we had an interesting conversation about some of the legal challenges regularly faced by archives and archivists:

  • Who owns the records?
  • How do we reconcile copyright protection with access?
  • How do we handle physical documents possessed by the donor but authored by someone else?
  • In the case of private, unpublished material, how do we reconcile privacy with access?

Some of these issues will be determined by various privacy and record keeping statutes, but others will depend on copyright. Naturally, because an archives might receive collections during or after the creator's lifetime, copyright duration becomes extremely relevant, specifically, copyrights for works created prior to January 1, 1978.

Why is January 1, 1978 Important?

January 1, 1978 is the effective date of the Copyright Act of 1976, which, among other things, significantly changed the way we calculate copyright duration. The law prior to the ’76 Act was the Copyright Act of 1909. Under the 1909 Act, a work was protected by federal copyright law if it was either published (copies disseminated to the public) or registered. Federal copyright protection lasted for 28 years from the date of publication or registration, with an optional 28 year renewal term, for a maximum total of 56 years of protection.

Current Copyright Duration

The '76 Act changed the old system, eliminating the mandatory renewal for new works going forward. Now, for works created after January 1, 1978, the duration is either

  • For works by one author: the author’s life + 70 years
  • For works by two or more authors: the life of the last surviving author + 70 years
  • For anonymous, pseudonymous, or works for hire: 95 years from publication or 120 years from creation, whichever expires first

Copyright Duration for Works Created Before January 1, 1978

Determining copyright duration for older, pre-1978 works is a little more complicated because the calculation uses elements from both the 1909 and ’76 Acts.

The first step in the analysis is to determine whether the work was already subject to federal protection. In other words, was the work published or registered? If the work wasn’t published or registered, then we generally use the same calculation as we would for post-1978 works. Sounds easy enough. If the work WAS already subject to federal copyright protection, however, then we have some more work to do.

Protected pre-1978 works are still subject to the 1909 Act system, 28-year-plus-renewal term. Now, however, the renewal term has been extended from 28 years to 67 years, granting a total of 95 years of statutory copyright protection for those works. To determine copyright duration for these works, we need to know (1) the publication/registration date and (2) whether the work was its initial 28-year term or its renewal term on the effective date of the ’76 Act.

  • For works in their first term on January 1, 1978: copyright owner still had to voluntarily renew the copyright
  • For works in their renewal term on January 1, 1978: renewal term was automatically extended from 28 to 67 years
  • For works copyrighted between January 1, 1964 and December 31, 1977 (right before the effective date of the ’76 Act): the works would be automatically renewed, and renewal registration would be optional

Works that were published prior to January 1, 1923 are now public domain because the 95-year copyright term has expired.

I hope this information is useful. For more details, check out the Copyright Office’s Circular 6A, which describes copyright renewal, and Circular 15A, which explains copyright duration in more detail.

If you’re dealing with a copyright duration issue, it’s always a good idea to consult with a copyright attorney.

As always, if you have any questions, feel free to contact me.



Choice of Entity for Sole Business Owners Part III

This is the final part of a three-part series on choosing a business entity for sole business owners. Click here for my previous posts on Corporations, and here my first post on Sole Proprietorships.

Limited Liability Company (L.L.C., L.C.)

Limited Liability Companies are another popular option for sole business owners. LLCs are owned by members who hold membership interests/units, managed by, uh, managers, and governed by an Operating Agreement. An LLC combines the limited liability protection of a corporation with the pass-through taxation of a sole proprietorship or partnership. It’s also highly flexible. LLCs are given fairly broad discretion to manage themselves, and they have a wide selection of tax treatment options.

By default, a single-member LLC will be taxed as a sole proprietorship (income reported on Form 1040 Schedule C), and a multiple-member LLC will be taxed as a partnership (LLC income reported on Form 1065 and members’ pro rata share reported on Form 1065 Schedule K-1). However, an LLC may alternatively elect to be taxed as a C corporation or an S corporation.

Another advantage of an LLC is that there are no formalities. The manager and her responsibilities are typically designated by the operating agreement, and thus there is no requirement for members to hold elections or regular meetings. In light of this, however, it’s wise for even a single-member LLC to have an operating agreement, both to set forth the rules, regulations, and policies of the company and, as with corporations, to document that the company is separate from the owner for limited liability purposes.

In Massachusetts, LLCs are formed by submitted a Certificate of Organization with the Secretary of the Commonwealth. As with corporate bylaws, an operating agreement is not filed with the Secretary.

With all this flexibility comes a cost, however. At $500 apiece, LLCs have the highest initial filing fee and annual report fee (equivalent to that of a Massachusetts Limited Liability Partnership). Nevertheless, LLCs are a favored option because they combine the benefits of corporations, sole proprietorships, and partnerships, with added flexibility and without the strict formalities. Additionally, licensed professionals may form a Professional Limited Liability Company (P.L.L.C.), which confers the same professional liability insulation between members as a professional corporation.

In Sum:

  • + Flexible
  • + Limited liability protection
  • + Pass-through taxation by default
  • + Numerous alternative tax treatment options
  • + Ease of formation
  • + No formalities
  • + Allows for growth
  • + Survives departure of members
  • - Expensive to form and maintain

Massachusetts Limited Liability Company Resources

LLC Forms

Massachusetts Limited Liability Company Act, Mass. Gen. Laws. ch. 156C

LLC Tax Treatment Options (IRS)

In honesty, this series was originally one short post that ended up about five times longer than I expected it to be. In any event, hopefully this has been a helpful little basic primer on business entity considerations for sole owners. Again, selecting an entity is a decision that depends on your preferences, budget, and long- and short-term goals among other things. While my intention here is to provide you with general information to help you make a more educated decision, this is no substitute for consulting with a business attorney and a CPA who can give you a more personalized recommendation based on your specific situation.

As always, if you have any questions, feel free to contact me!

Choice of Entity for Sole Business Owners Part II

This is a continuation of a series about choosing an business entity for sole business owners. Here's my first post, about Sole Proprietorships.

Corporations (Corp., Inc., Ltd.)

At the opposite end of the spectrum from Sole Proprietorships are corporations. Corporations are treated as separate from the individuals who own, manage, and operate them. The defining feature of a corporation is the governance structure: it’s owned by shareholders, who elect directors, who appoint officers. Officers typically manage day to day operations, while directors often handle broader strategic decisions, such as whether to reinvest profits or declare dividends. For our purposes, though, you’ll be the sole shareholder, director, and possibly the sole officer. Unlike sole proprietorships (and partnerships), the corporation survives the death of its owners.

Corporations provide “limited liability” to their shareholders, meaning that the shareholders are generally not responsible for the debts, liabilities, and obligations of the corporation. However, the limited liability protection does not shield professionals, such as doctors, lawyers, architects, engineers, etc., from liability for committing malpractice. Additionally, a claimant suing a corporation may seek to “disregard the corporate form” (commonly called “piercing the corporate veil”) in order to hold the shareholders personally liable. Owners of one-person corporations can be at particularly high risk if they don’t carefully comply with all formalities and record keeping.

For example: If Dr. Shanika Thomas from our last post formed “Thomas Healthcare Center, Inc.,” it defaulted on a small business loan, and the lender sued to collect, Thomas Healthcare Center, Inc. would be responsible for the debt, not Dr. Thomas. However, if Dr. Thomas was the sole shareholder, director, President, Treasurer, and Secretary, the lender could seek to “pierce the veil” and hold Dr. Thomas personally liable for the debt on the grounds that she is essentially a sole proprietor.

Forming a Massachusetts corporation is fairly straightforward. Simply submit your Articles of Organization with the Secretary of the Commonwealth. As of this post, the filing fee is $275, which allows you to issue up to 275,000 shares of stock. Every additional 100,000 shares costs an extra $100. Note that in Massachusetts, business filings are public record and freely searchable at the Secretary’s website.

In addition to Articles of Organization, you should also enact corporate bylaws, even if you’re the sole shareholder, director, and officer. The bylaws set forth how the corporation will be governed. Not only is it generally wise to have bylaws to guide you in managing your company, but they also lend documentary support to your claim of limited liability. Bylaws should also establish how the corporation will carry on in the event that owners and directors die, become incapacitated, or otherwise depart from the corporation. The bylaws are not filed with the Secretary of the Commonwealth.

You must also elect your directors and appoint your officers, even if you’re a sole-shareholder corporation. The Articles of Organization require you to name your initial directors and officers, and during the life of your corporation, you must hold shareholder meetings to elect or reelect the directors, and director meetings to appoint or reappoint the officers. It may sound silly, especially if you run your business out of your own home, but holding shareholder meetings, elections, and director meetings, and carefully documenting the minutes of these meetings can help support your claim of limited liability in the event that a claimant attempts to hold you personally liable.

In order to keep your corporation in good standing, you must file an Annual Report with the Secretary of the Commonwealth. The current annual report filing fee is $125.

Corporations can come in a variety of flavors depending on ownership and tax treatment. Here, I’ll stick to some basic distinctions: the C Corporation, the S Corporation, and the Professional Corporation.

C Corporation

The main distinguishing feature of a C Corporation is tax treatment. You’ve likely heard the phrase “double taxation” regarding C corporations. This is because C corporations are taxed on their income at two levels. First, the corporation itself pays annual income tax just as an ordinary person would. Second, if the corporation distributes dividends to the shareholders, the shareholders pay income tax on those dividends. If a corporation earns a profit or has a surplus, the directors may decide to declare a dividend, in which case the corporation distributes the profits to the shareholders, typically proportionate with the amount of shares owned.

As you might imagine, this usually isn’t very appealing to the sole owner of a small business. Indeed, C corporations are often preferred by larger, more sophisticated businesses. The reason is a little technical. A corporation can’t necessarily decide when it will incur taxable income at the first level – its annual income will likely depend on the external factors such as the market and consumer demand. However, the corporation can decide when to declare a dividend, and thus when to incur a taxable event at the second level. This can be a very powerful tool for tax planning. Of course, there are reasonable limits: the IRS (and likely the Massachusetts Division of Revenue) will penalize a profitable corporation that refuses to declare a dividend solely because it doesn’t want to incur taxes.

In sum:

  • + Limited liability protection
  • + Allows for easy growth
  • + Can defer taxable event
  • - Certain formalities required to sustain liability protection
  • - Incorporation fee and annual report fees
  • - Double taxation

S Corporation

S Corporations are a popular alternative for small businesses. The shareholders still enjoy the same limited liability protection, but the profits and losses are “passed-through” to the shareholders, which they report on their personal income tax returns and pay taxes on at their personal income tax rate. The tax treatment offered by the S corporation tends to be appealing to small business owners.

The flip side is that there are a number of eligibility requirements for S corporation status: there must be no more than 100 “eligible” shareholders (individuals, certain trusts, and estates), the corporation may issue only one class of stock, and certain corporations are ineligible. For many sole-shareholder corporations, the favorable tax treatment may nevertheless strongly outweigh burden of complying with the eligibility requirements.

To form a Massachusetts S Corporation, you follow the same steps as with a C Corporation, except that once you’ve filed your Articles of Organization, you must file IRS Form 2553 (Instructions here) electing S corporation status.

In Sum:

  • + Pass-through taxation
  • + Limited liability protection
  • - Same formalities to sustain liability protection
  • - Can’t issue multiple shares of stock
  • - May have limited number of shareholders
  • - Certain businesses ineligible
  • - Incorporation and annual report filing fees

Professional Corporation (P.C.)

Professional Corporations are a unique type of corporation available exclusively to licensed professionals. Functionally, a professional corporation can be either a C corporation or S corporation, so the same advantages and disadvantages apply. Just as with any other limited liability entity, the professional corporation doesn’t shield shareholders from personal liability for their own individual negligence or malpractice. However, the distinct advantage of a professional corporation is that it does shield shareholders from liability for malpractice caused by other shareholders.

For example: Suppose Dr. Thomas incorporated “Thomas Healthcare Center, P.C.,” where she was the sole shareholder, director, and officer. Wanting to serve patients at all ages, she brings on her classmate, Jackie Wu, a pediatrician, as another shareholder. If a patient sues Dr. Wu for malpractice, then Dr. Thomas is shielded from personal liability as long as she did not participate in the treatment of the aggrieved patient.

In exchange for this added protection, there are certain ownership and governance restrictions on Massachusetts professional corporations. All incorporators, all shareholders, a majority of the directors, and the president and vice president of the corporation must be licensed professionals. Additionally, either the Articles of Organization, bylaws, or a shareholder agreement must include a “corporate share redemption provision” requiring the corporation to redeem the shares of a shareholder who dies, becomes unable to practice (due to incapacity or disciplinary action), or transfers their shares to a non-licensed individual. See Massachusetts Professional Corporation Law § 12, Mass. Gen. Laws ch. 156A, § 12.

To form a professional corporation, you must file Articles of Organization with the Secretary of the Commonwealth, and, unlike non-professional corporations, you must explicitly state the professional services your corporation will provide. Additionally, you must also include a certificate signed by the relevant licensing board stating the name of the corporation and listing the incorporators, officers, directors, and shareholders. Otherwise, formation and maintenance parallels that of a C corporation or S corporation.

A professional corporation is a worthwhile consideration for a licensed professional who finds the corporate entity appealing. A professional corporation might be particularly appealing to professionals hoping to establish a solely owned company while leaving room for potential growth.

In sum:

  • + Limited liability protection
  • + Insulated from liability for other shareholders’ malpractice
  • + Allows for growth
  • - Only available to licensed professionals
  • - Certain formalities required to sustain liability protection
  • - Incorporation fee and annual report fees
  • - Additional incorporation and reporting requirements

Massachusetts Corporation Resources

Corporate Forms (Standard Domestic)

Corporate Forms (P.C.)

Massachusetts Business Corporation Act, Mass. Gen. Laws ch. 156D

Massachusetts Professional Corporation Act, Mass. Gen. Laws ch. 156A

S Corporation Summary (IRS)

This concludes Part II of my three-part miniseries on choice of entity for sole business owners. Look forward to Limited Liability Companies next week!

As always, if you have any questions, leave a comment or contact me!

Choice of Entity for Sole Business Owners

What if you're not only a small business owner, but also the only owner of your business? Maybe you’re currently operating as a sole proprietorship, but for one reason or another, you got the idea that you should form a business entity. How do you choose one? What are the advantages and disadvantages of each one? In this three-part miniseries, I’ll take you on a whirlwind tour of (Massachusetts) business entity options for sole business owners. We'll be talking about Sole Proprietorships, Corporations, and Limited Liability Companies.

Choice of entity is a major decision with certain legal, financial, and tax consequences, so it shouldn’t be taken lightly. Which entity is right for you is a business decision depending on a variety of factors, but I’d wager that the most significant ones are typically

  1. Ownership
  2. Liability protection
  3. Tax implications
  4. Costs
  5. Ease of formation

Your preferences with respect to each of these issues will likely strongly influence which entity you select. Now, without further ado, let’s dive in.

Sole Proprietorship

The Sole Proprietorship is the default business designation. It isn’t actually a business entity at all: it’s just you, you are the company. For better or for worse, there are no layers between you and your business. The big advantage of the sole proprietorship is that it’s cheap and easy to form. There are no registration requirements – if you’re doing business for yourself and haven’t formed an entity, you’re already a sole proprietor. You don’t need to file a separate tax return: you report your business income on Schedule C of your personal Form 1040. You can still hire employees. “Sole proprietor” doesn’t mean one-man or one-woman business, it simply means that you’re the sole owner.

The only filing requirement is that, depending on your business name, you may have to register a DBA (“Doing Business As”) with the city or county in which you do business. If you use a name other than your legal name, also known as a “fictitious name,” you need to register your fictitious name in each city or county in which you maintain a location.

For example: if a physician named Shanika Thomas wanted to open a primary care clinic called the “Thomas Healthcare Center,” with her main office in Newburyport and a second location in Boston, she would need to register DBAs with both Newburyport/Essex County and with the City of Boston. However, if Dr. Thomas was operating her clinics under the name “Shanika Thomas, M.D.,” she wouldn’t need to register any DBAs.

Additionally, some banks may wish to see a city/county business registration certificate in order to open a business bank account.

The major disadvantage of a sole proprietorship is that, because the owner is legally the business, there’s no liability protection. This means that the sole proprietor is personally responsible for the debts and liabilities of the business.

For example: if Dr. Thomas defaulted on a small business loan she borrowed to lease the clinic spaces, she would be personally liable for the debt.

Another disadvantage is that expansion is somewhat limited. You can certainly grow your company, hire more employees, and open additional locations, but you can’t take on partners or co-owners. Moreover, the business terminates upon the death of the sole proprietor. That said, depending on the nature of your business, a sole proprietorship might be a good option. I think that the sole proprietorship can be a particularly good option for licensed professionals because, as I’ll discuss further in the post covering Corporations, the liability protection afforded by a corporation or limited liability company does not cover professional liability. If you’re a licensed professional with no employees, a mainly virtual/online practice, and you already carry professional liability insurance, a sole proprietorship might be a reasonable option.

In sum:

  • + Little to no filing requirements
  • + No filing fees or annual fees
  • + Taxed as an individual
  • + May hire employees
  • - No limited liability protection
  • - No co-ownership
  • - Doesn’t survive owner

In my next post, we'll discuss Corporations! 

As always, if you have any questions, don't hesitate to contact me!

S.D.N.Y. Embittered by Embedding

Just a couple weeks ago, the Southern District of New York issued an opinion that may very well change the way we use social media. In Goldman v. Breitbart News Network, LLC et al., the court held that embedding a tweet containing a copyright protected photograph constituted copyright infringement.

By way of background, the photo in question was taken in July of 2016 by the plaintiff, Justin Goldman, and it depicted Tom Brady and Danny Ainge, among others, in East Hampton. Goldman uploaded the photo to his Snapchat Story, and from there it went viral, ultimately landing on Twitter. The defendants, a variety of news outlets, including Breitbart, Time, Vox, the Boston Globe, and NESN, embedded the tweets containing the photo into their articles about Tom Brady’s effort to help the Boston Celtics recruit Kevin Durant. Goldman sued the news companies for copyright infringement on the grounds that he never publicly released or licensed the photo, and therefore they infringed his exclusive right to publicly display the work under section 106(5) of the Copyright Act.

On motion for partial summary judgment, the defendants argued that the court should apply what they call “the Server Test,” in which a website publisher is only directly liable for infringement if the image at issue is hosted on the publisher’s own server. The Server Test originates from the 2007 case, Perfect 10 Inc.* v. Amazon, Inc. (yeah, that Perfect 10). In that case, the Ninth Circuit affirmed a Central District of California decision holding that the thumbnail images created by Google for display on Google Image Search infringed copyright because the thumbnails were stored on its own server. However, the court also held that the full-size images users would see after clicking the thumbnail did not infringe because they were merely linked to photos stored on third-party servers. The defendants felt that the Perfect 10 reasoning applied here.

Naturally, Goldman argued against applying the test, claiming it would not only yield a result that would be inconsistent with the Copyright Act, but would also eliminate any incentives for websites to pay licensing fees.

The court sided with Goldman and rejected applying the Server test. First, the court strongly disagreed with the notion that copyright infringement could hinge on whether a party had possession of the image:

Nowhere does the Copyright Act suggest that possession of an image is necessary in order to display it. Indeed, the purpose and language of the Act support the opposite view. The definitions in § 101 are illuminating. First, to display a work publicly means to “to transmit . . . a . . . display of the work . . . by means of any device or process.” To transmit a display is to “communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent.” Devices and processes are further defined to mean ones “now known or later developed.” This is plainly drafted with the intent to sweep broadly.

The court, citing excerpts from the defendants’ declarations, also highlighted the affirmative effort made by the defendants to embed the tweets, namely, copying the embed code into the HTML code for the offending webpages.

Second, the court relied on the guidance of the Supreme Court of the United States’s decision in American Brodcasting Cos., Inc. v. Aereo, Inc., concerning a service provided by Aereo which allowed subscribers to stream television programs over the internet as they were being broadcast over the air. In Aereo, Aereo was found liable for infringing ABC’s public performance right even though the subscriber controlled which “performances” (TV shows) were being transmitted, not Aereo:

This difference means nothing to the subscriber. It means nothing to the broadcaster. We do not see how this single difference, invisible to subscriber and broadcaster alike, could transform a system that is for all practical purposes a traditional cable system into a “copy shop that provides patrons with a library card.”

Third, the court emphasized that Perfect 10, though affirmed by the Ninth Circuit, was in fact not widely adopted. The case law is scattered at best, and those U.S. District Courts that did address Perfect 10 directly often did so with respect to the exclusive right to distribute a work under the Copyright Act, not the exclusive right to publicly display it. The court also noted that two deciding factors in Perfect 10 were that Google, the defendant, operated a search engine, and that the user made an active choice to click an image before it was displayed.

The court concluded with the position that the results are not nearly as dire as the defendants suggest. There are a number of important defenses available: the argument that Goldman released the photo to the public domain by sharing it on Snapchat, fair use, and a defense under the DMCA.

What’s important to note about this decision is that it only addresses the question of whether the act of embedding a copyrighted work violates the public display right under the Copyright Act. It does not address liability or any defenses. The parties agreed to let the court divide the litigation into two phases, with the ultimate decisions regarding liability occurring at a later date. In this particular case, there’s a strong argument for fair use, as the photo was newsworthy and was subsequently used by the defendants for sports journalism.

Personally, I’m not yet alarmed by this decision. As I mentioned, the court hasn’t ruled on liability yet, and the defendants may very well appeal the decision to the Second Circuit regardless. Moreover, as the court said, the case law on this issue is both sparse and scattered, and this is currently the law in but one U.S. district.

What do you think? Do you think the S.D.N.Y. got it right? I’d love to hear your thoughts in the comments!

Amazon Brand Registry: A TM Protection Tool for Online Sellers

Last year, Amazon overhauled its brand registry system, enabling brand owners to take stricter control over the sale of their products. Provided the brand meets Amazon’s eligibility criteria, the program gives brand owners increased authority over listings featuring their brand names, among other (supposedly) more robust tools geared toward curtailing trademark infringement and sale of counterfeit goods.

There is a caveat, however: sellers seeking to take advantage of the program must first show ownership of a registered trademark. Moreover, Amazon currently only offers this program to owners of registered trademarks that

  1. include words, letters, or numbers, and
  2. “have been issued by government patent and trademark offices in the United States, Canada, Mexico, India, Australia, Japan, France, Germany, Italy, Spain, the United Kingdom, and the European Union.”

These criteria limit eligibility pretty narrowly. First, only owners of registered word marks or composite marks (words and design) may enroll. This means that trademark owners whose only registrations are for pure design marks with no “literal elements” are -- at least for now -- SOL. Second, honestly, it isn’t clear to me whether “government patent and trademark offices in the United States” includes solely federal registrations issued by the USPTO, or if it includes state-issued registrations as well. If I were to guess, though, I’d assume it means federal registrations only. Fortunately, aside from these two restrictions, the requirements otherwise seem straightforward: provide your trademark registration or serial number, images of the logo, images of the products carrying the logo, a description of the applicable product categories, and the countries in which the products are manufactured and distributed. Owners of federally-registered trademarks will have already provided most of this information to the USPTO.

In any event, for Amazon sellers who meet the requirements, Amazon Brand Registry might be another valuable tool in your trademark protection tool belt. For more details on the program, check out the Amazon Brand Registry summary and FAQs.

If you have any questions about trademark protection or trademark registration, feel free to contact me!

UDRP, for When "Your Domain is in Another Castle."

When you think of trademark enforcement measures – y’know, as one does – I would wager that the first ones to come to your mind are cease and desist letters and lawsuits. Of course, this is for good reason: the former can be very economical, and the latter can provide closure. However, in the age of information technology, where money is earned and lost depending on web traffic, and a high-demand domain name can command prices in the millions, the value of securing a quality domain name cannot be understated. So what do you do when you, a (legitimate) trademark owner, seek to register a domain for your trademark, and you’re faced with

No, I  don't  want "thedomainyouwantisunavailable .us ," and don't even get me  started  on " .biz ."

No, I don't want "," and don't even get me started on ".biz."

Well, under certain circumstances, trademarks owners may have another option: filing a “UDRP” complaint.

The UDRP, or “Uniform Domain Name Dispute Resolution Policy” – liberal understanding of acronyms, I know – is a policy adopted by ICANN and mandatorily adopted by all domain registrars. The policy allows the owner of a registered trademark to file a complaint against the registrant of an infringing domain with the goal of cancelling, suspending, or acquiring the offending domain. Complaints are submitted to the dispute resolution service provider of the complainant’s choice, and are reviewed by either a single arbitrator or a panel of three, depending on the parties’ preferences (and budgets). Respondents have 20 days to answer, and once an arbitrator has been appointed, the decision is made within 14 days. From complaint to decision, UDRP proceedings can be resolved in under as little as 60 days.

In order to file a complaint, the aggrieved party must have a trademark. Beyond that, the complaint is fairly straightforward and follows a pretty standard format, though there may be some minor differences between arbitration providers. Generally, the complaint must set forth:

  • the name of the complainant;
  • the name of the respondent;
  • the offending URL and domain registry info;
  • the complainant’s relevant trademarks, including descriptions of goods and services;
  • the bases for the complaint; and
  • the relief sought

Rule 3 of the UDRP Rules describes the specific contents required in a UDRP complaint.

There are currently five providers approved by ICANN: the Asian Domain Dispute Resolution Center, the National Arbitration Forum, the WIPO Arbitration and Mediation Center, the Czech Arbitration Court Arbitration Center for Domain Disputes, and the Arab Center for Domain Name Dispute Resolution. The providers abide by the same UDRP rules of procedure, and they all have jurisdiction to handle UDRP complaints from anywhere, so deciding is mainly a matter of personal preference (and, again, budget). Like U.S. District Courts, however, each provider has its own local/supplemental rules.

Of course, there are drawbacks. As with any legal proceeding, there’s no guarantee of success. A respondent may successfully defend against a UDRP complaint by showing legitimacy of use. Another disadvantage is that, because a UDRP action solely concerns domain name registrations, the scope of relief is narrow and relates only to the complained-of domains and is only applicable against the named domain registrant of record. To that end, a UDRP decision against an infringing respondent won’t (necessarily) put them out of business, especially if (a) they own many domains, or (b) the named domain registrant is different from the actual infringer. Moreover, while a UDRP action is cheaper and quicker than litigation, the up-front cost is still substantial: the filing fee for a single-arbitrator proceeding is in the neighborhood of roughly $1500 across all five providers, give or take a couple hundred. Given the costs and risks associated with UDRP proceedings, it is likely an avenue best used by owners of registered trademarks or owners who have already invested heavily in their trademarks.

In sum:


  • Easy
  • Quick turnaround
  • Cost-effective


  • High up-front cost
  • Narrow relief
  • No guarantee of success

UDRP complaints are a helpful trademark enforcement tool, especially today, where domain names are a valuable commodity. The relatively low cost and quick turnaround make it a good intermediate step for those aggrieved trademark owners who have already sent (multiple) cease and desist letters, and who have the resources to litigate but are not yet ready to make the commitment.

As always, if you have any questions, feel free to contact me!



Trademark Scammers

So you applied to register a trademark with the USPTO. Congratulations! There’s still a long road ahead, but getting started means you’re taking your brand seriously. In addition to keeping up with your filing deadlines at the USPTO, you also have to beware of unsavory characters.

Trademark registration applications are public record. If you filed the application yourself (of course I would recommend hiring a trademark attorney), all of the contact information you entered, be it your home address or business address, is searchable. Moreover, third party websites like Justia and Trademarkia gather information from the USPTO and share it themselves. The consequence of this is that your contact information can be easy to find for scammers and opportunists promising to provide you with vague trademark-related services.

At best, you’ll receive emails for trademark searches and other poorly-defined trademark “protection” services. They’re annoying and, if they come from a lawyer or law firm, almost certainly unethical (most if not all states’ Rules of Professional Conduct prohibit attorneys from sending targeted solicitations, see rule 7.3 of the Model Rules of Professional Conduct). I’ve received offers to “protect” my clients' trademarks in China within days of filing their federal registration applications.

At worst, however, some scammers use official-looking names and seals to send phony bills and invoices to trademark applicants.

Not that kind of official-looking seal.

Not that kind of official-looking seal.

People fall for these scams, legitimately believing they owe fees to the USPTO. Unfortunately, enough folks have been victims of these scams that the USPTO has an entire page dedicated to identifying and protecting yourself from phony solicitations, including a long list of reported companies.

If your application is filed by a trademark attorney, the attorney will usually enter their own contact information, so they can take the brunt of the spam. However, the owner’s name and address is still required on USPTO filings, so there’s still the possibility of some crap getting through.

How can you protect yourself? Again, I strongly recommend hiring a trademark attorney (and so does the USPTO). A trademark attorney will track your application and inform you of critical deadlines and fees. An attorney can also assist you in the event that you do receive a questionable email or solicitation. If you decide to apply to register a trademark without the assistance of counsel, be aware that these scammers exist, and be very cautious when opening trademark-related communications. If you’re a trademark applicant, all of your official trademark correspondence will come directly from the U.S. Patent and Trademark Office ( Don’t pay for anything unless you’ve been instructed to by the USPTO.

If you have any questions, as always, feel free to contact me!

On Marijuana-Related Trademarks

There have been quite a few pot-related trademark cases in the last year.

Back in June, the Trademark Trial and Appeal Board (TTAB) decided In re PharmaCann LLC, Serial Nos. 86520135 and 86520138 (June 16, 2016) (precedential), affirming the USPTO examining attorney’s refusal to register the marks “PHARMACANN” and “PHARMACANNIS” for “retail store services featuring medical marijuana” and “dispensing of pharmaceuticals featuring medical marijuana.” The basis for the refusal was that the claimed services are illegal under the Controlled Substances Act (CSA), and therefore PharmaCann couldn’t have a bona fide intent to lawfully use the marks in commerce.

Before diving into the case, let me start by saying that there are many trademark registrations and registration applications for services relating to marijuana:

2080, and these are just the ones for marijuana-related  goods and services  .

2080, and these are just the ones for marijuana-related goods and services.

And not all registration applications get refused: many marijuana-related services are for education, advocacy, and other activities not related to distribution. However, I think the PharmaCann case – and the TTAB cases preceding it – represents a common misunderstanding by the public about drug laws: that state legalization has any force against federal prohibition.

What Happened in PharmaCann?

PharmaCann applied to register the PHARMACANN and PHARMACANNIS marks, and the examining attorney refused to register both because the goods and services described activities prohibited by the CSA. The examining attorney further requested that PharmaCann amend and clarify its goods and services. Interestingly, PharmaCann revised the goods and services descriptions in both applications to say “Dispensaries selling medical marijuana in compliance with Illinois state law.” As you might expect, the examining attorney issued final refusals on the same grounds.

PharmaCann appealed the refusal to the TTAB. On appeal, the examining attorney repeated his argument: the CSA prohibits manufacturing, distributing, or dispensing controlled substances, including medical marijuana, and PharmaCann’s services include selling, distributing, and dispensing medical marijuana. Case closed.

PharmaCann argued that its intended use of the marks doesn’t per se violate the CSA for two reasons. First, it argued that the Department of Justice has refused to enforce the CSA against medical marijuana since 2009:

[PharmaCann] claims that “[o]n October 19, 2009, the United States Department of Justice announced that it no longer would prosecute caregivers for providing medical marijuana or individuals for using medical marijuana, so long as the ‘actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana,’” and that “[o]n August 29, 2013, the Department of Justice renewed and reiterated its stance on not enforcing the [CSA] against medical marijuana.”

Second, PharmaCann argued that Congress has agreed with the DOJ position. In the Consolidated and Further Continuing Appropriations Act of 2015 (as renewed in 2016 and 2017), Congress prohibited the DOJ from expending funds to prevent states that have legalized marijuana from implementing their state laws authorizing the use, distribution, possession, or cultivation of medical marijuana. In short, if Congress and the DOJ aren’t enforcing the CSA against medical marijuana, the TTAB should follow suit.

The TTAB rejected both arguments. Regarding the DOJ’s position, the DOJ’s August 29, 2013 memorandum was intended merely as guidance for enforcement, and explicitly noted that “neither the guidance herein nor any state or local law provides a defense to a violation of federal law . . . .” As for the Congressional argument, the TTAB noted that Appropriations Acts did not make medical marijuana legal under the CSA. Ultimately, PharmaCann loses.

The CSA (and the Supremacy Clause) is Still a Thing

If this decision and others like it have anything in common, it’s the message that the Controlled Substances Act is still here despite what the individual states do. While PharmaCann’s Appropriations Act argument was novel, it isn’t an uncommon sentiment: “I operate in a state where growing, distributing, and using medical marijuana is legal, so I should be able to conduct my medical marijuana business.” That isn’t how the law operates, though. We have two systems of law, state and federal, and under the Supremacy Clause (Art. VI, cl. 2), federal law takes precedent. The CSA trumps state legalization statutes.

What Does it Mean?

Does this mean you can’t ever register a trademark for marijuana related goods and services? No. Does it mean that you can’t ever register a trademark that references marijuana? No. This case simply reinforces the principle that marijuana retailers and dispensaries are still “illegal” uses for purposes of trademark registration regardless of whether the applicant uses the mark in states where marijuana distribution is “legal.”

Additionally, the USPTO has tunnel vision: it is only ever concerned with one question, whether a trademark may be registered. Even PharmaCann can still use the PHARMACANN and PHARMACANNIS trademarks, they simply won’t enjoy the protections that come with registration. Moreover, the USPTO doesn’t enforce drug laws, it doesn’t force businesses to shut down— it doesn’t even handle trademark infringement actions. However, as I mentioned in my post about Matal v. Tam, all trademark registration applications are public record, including applicant information. While the USPTO doesn’t enforce drug laws, the information is publicly available and relatively easy to find.

As always, if you have any trademark questions, don't hesitate to contact me!