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Los Angeles Business Law Blog

Ferrari owners warned about posting photos of their cars online

Ferrari owners in California and around the country often post photographs of their cars on social media, but they may be wise to think carefully before doing so if the images involved could be construed as portraying the brand in a negative light. The iconic Italian sports car company takes its intellectual property rights extremely seriously, and it recently sent several sharply worded cease-and-desist letters to Ferrari owners who posted potentially embarrassing photographs of their vehicles on Facebook, Twitter and Instagram.

One of the letters was sent to a German athletic shoe designer who frequently posts images of his latest products placed on his bright green Ferrari 812 Superfast. The letter instructed the man to post no more such pictures and delete the images already online. According to Ferrari, the images depicted a lifestyle that was not in keeping with the company's image and associated the man's products with a brand that had been built over several decades and at considerable expense.

Trucking company claims Amazon infringed on its trademark

Many California residents use Amazon Prime to order products. However, a trucking company called Prime Inc. says that Amazon is infringing on its trademark by using the word "prime" on trailers used to deliver goods. The company has filed a lawsuit in the Western District of Missouri seeking financial damages related to the infringement. Specifically, the company claims that it is entitled to three times Amazon's profits or three times the losses that the infringement has caused.

Prime says that it first used the word on trucks 40 years before Amazon did. The company further claims that the word prime is paramount to its marketing message, which could leave it vulnerable if the trademark is not allowed to stand. Although some could claim that Amazon uses the word prime in a different manner, the lawsuit asserts that they are identical in appearance and commercial impression.

Appeal decision of copyright infringement suit

California residents who are interested in intellectual property matters should be aware of a ruling of the United States Appeals for the Ninth Circuit. The court rejected in part and affirmed in part the dismissal of a district court regarding the allegations of copyright infringement, breach of contract and the violation of the Digital Millennium Copyright Act. The court determined that there were aspects of the claims that were disqualifying based on the patent infringement suit that was previously filed.

The plaintiff filed a patent infringement lawsuit against the defendant in 2013 alleging that the defendant had created a piracy detection technology similar to the one the plaintiff created and after the defendant became aware of critical data pertaining to the plaintiff's technology and digital rights management product. When the court determined in a separate proceeding that one of the patents of the digital rights management product was invalid, the plaintiff dismissed the patent suit voluntarily and with prejudice.

Trademarks allowed to have foul language

The Supreme Court decided in June 2019, that trademarks with foul language would be legally permitted, striking down a long-time ban on the practice. The ban on immoral or offensive language in trademarks affected companies in California and many other states, but the court decided that this ban violated the constitutional free speech rights of Americans. The restriction on trademark language had been in place since 1905.

All nine justices agreed that the ban on foul language trademarks was a constitutional violation. Several of the justices, however, wrote a separate opinion stating that a ban on scandalous language could be permitted. In 2017, the court struck down a similar ban on disparaging trademarks when they decided on a case involving a rock band with an offensive name. The Patent and Trademark Office said that it is evaluating the latest decision.

Should your business use a patent or trade secret?

For many businesses, intellectual property is their most important asset. It is the one thing that separates the company from all others, and it can allow any business to remain competitive. It is for this reason that any business with intellectual property must go to great lengths to protect it in the form of either a patent or a trade secret. 

There are substantial differences between these two concepts. As a business owner, you must weigh the pros and cons of each one so that you can make an informed decision regarding your business. The right decision can help your business thrive for years to come. 

Insurance policies may exclude trademark infringement defense

Businesses in California may want to pay close attention to their insurance coverage, especially if they will be dealing with intellectual property issues. This is illustrated in one case where a company sought coverage from their insurer for a lawsuit that accused the firm of infringing a trademark. However, the insurance company said that its policy did not provide coverage for intellectual property disputes, disclaiming its responsibility to defend the case. The company's case was dismissed after the insurance company demonstrated exclusions in its business liability and technology policies that addressed trademark infringement cases.

The company claimed that it was entitled to receive coverage for its legal defense under its coverage for personal and advertising injury. The description of this listed eight different situations, including alleged copying of an advertisement. However, an endorsement on the company's policy excluded nearly all of the eight different allegations, including copying in advertising and associated trademark infringement. In addition, the company also sought to use its technology policy to obtain coverage. However, the court accepted the insurer's argument that this policy covered technology services provided to others and excluded all intellectual property claims.

How to keep trade secrets protected

Companies in California and throughout the nation most likely have trade secrets that they need to protect. This can be done in a variety of ways including telling employees what they can and cannot share with others. Furthermore, the consequences for sharing protected information should be made clear in an employment contract. In the event that trade secret rights are violated, a company should take legal action quickly.

To minimize the chances that information is shared inappropriately, only certain people should have access to it. For instance, access to computer code should only be shared with key engineers or key members of the IT department. It may be a good idea to have a manager who is responsible for determining who gets to handle trade secret iformation, and when. He or she would also be responsible for creating a chain of custody logs and other security measures needed to protect vital information.

Guns N' Roses suing brewery for trademark infringement

California-based band Guns N' Roses is suing a brewery in Colorado over a menu item that bears the name "Guns N' Rosé" ale. The band claims the name the establishment is using for its ale creates the false impression that they are somehow associated with it. The brewery at the center of the matter attempted to trademark the name for its product in 2018, which is what ultimately attracted the band's attention.

The trademark infringement litigation related to this matter was initiated after the brewery was contacted by the band's manager. The business subsequently withdrew their trademark application. However, they continued to sell the rosé ale. The brewery also sells merchandise with the name that's similar to the one that's been used by the band for more than 30 years.

3 aspects of California's overtime laws

A business owner has to understand some basics about how labor laws work. Not taking the time to speak to someone who can educate you on such laws may result in a rash of lawsuits or even a company shutdown.

One of the most crucial elements of business ownership is understanding wage and hour laws, especially when it comes to overtime. Knowing how much you have to pay employees is integral to staying up and running. Keep these three essential facets of California's overtime laws in mind to avoid getting in trouble.

California businesses must protect their intellectual property

The past decade has seen a growing trend of companies in California and elsewhere buying up patents that were sitting on the shelf because they were not worth commercializing. In some cases, companies purchased such patents en masse for the sole purpose of litigating patent infringement cases against businesses that produced goods or services resembling a feature in one of the patents. In many cases, the lawsuits were directed at tech companies who began to buy up such patents themselves as defense mechanisms.

Acquiring these so-called troll patents has proven to be a gold mine for many of the patent purchasers. However, the frivolous patent lawsuits are erasing as much as $60 billion in firm wealth each year, according to a study by Harvard Business Review. The Obama Administration attempted to fix the problem by working with Congress to pass legislation aimed at reducing such patent lawsuits. However, the patent trolls simply changed their business model to go after trade secrets.

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