Earlier this week, in Matal v. Tam, the United States Supreme Court unanimously ruled in favor of Portland-based rock band, the Slants, finding that the section of the Lanham Act banning offensive trademarks was an unconstitutional restraint on free speech.
Slants founder Simon Tam attempted to trademark the band's name in 2011, but the U.S. Patent and Trademark Office denied the request pursuant to 15 U.S.C. § 1052(a), the section of the Lanham Act that bans offensive or disparaging trademarks. The band members, who are Asian-American, selected the name to reclaim the derogatory term and to drain its denigrating force.
The Lanham Act contains provisions that bar certain trademarks, including 15 U.S.C. § 1052(a) (the disparagement clause), which prohibits the registration of a trademark "which may disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute." When determining whether a trademark is disparaging, an examiner at the PTO applies a two-part test -- first, considering the likely meaning of the trademark, and second, considering whether a substantial composite of persons find the term offensive. Mr. Tam argued that the disparagement clause violated the Free Speech Clause of the First Amendment.
The Government argued that the disparagement clause did not violate the Free Speech Clause because: (1) trademarks are government speech, not private speech; (2) trademarks are a form of government subsidy; and (3) the constitutionality of the disparagement clause should be tested under a new "government-program" doctrine. The Supreme Court rejected all three arguments, and ultimately concluded that the disparagement clause was the "essence of viewpoint discrimination," as it reflects the Government's interest in preventing speech expressing offensive ideas.
Today, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction blocking the U.S. Department of Labor ("DOL") from implementing its latest revisions to the Fair Labor Standards Act ("FLSA").
In March 2014, President Obama issued a memorandum directing the Secretary of Labor to "modernize and streamline" the existing overtime regulations for executive, administrative, and professional employees. On May 23, 2016, the DOL published the Final Rule, increasing the salary level required to qualify for "white collar" overtime exemptions from $23,660 ($455 per week) to $47,476 ($913 per week). Additionally, the Final Rule increased the total annual compensation requirement for "highly compensated employees" from $100,000 to $134,000. The Final Rule was to take effect on December 1, 2016, with a mechanism for automatically updating the salary and compensation levels every three years.
A coalition of 21 states and more than 50 business organizations challenged the DOL's Final Rule in federal court, arguing that the Obama administration overstepped its authority. The court ultimately concluded that the states established a prima facie case that the DOL's salary level under the Final Rule and the automatic updating mechanism are without statutory authority and issued a nationwide preliminary injunction.
In June of this year, we reported that a judge in Texas issued a nationwide preliminary injunction blocking enforcement of the Department of Labor's controversial Persuader Rule, which would have required disclosures by any consultant -- including a company's attorney -- who engaged in activities for the purpose of directly or indirectly persuading employees in connection with their right to union representation. In a November 16 order, Judge Sam Cummings made the earlier injunction permanent, with nationwide effect. Judge Cummings' order notes that his preliminary injunction is currently on appeal to the U.S. Court of Appeals for the Fifth Circuit.
Given the upcoming change to a Republican administration, it seems unlikely that the Persuader Rule will be revived.
Our prior report on the Persuader Rule is available here.
The Oregon Supreme Court recently reversed the Oregon Court of Appeals in Neumann v. Liles, a defamation lawsuit involving a negative review of a wedding venue. The plaintiff, an operator of the venue, was the target of a review on google.com calling her, among other things, "two faced, crooked, and . . . rude." She sued the author of the review, who had been a guest at a wedding hosted at plaintiff's venue. The Oregon Court of Appeals found that the trial court improperly granted the defendant's special motion to strike under Oregon's anti-SLAPP statute, finding that the review contained potentially defamatory statements regarding the plaintiff's honesty and business ethics.
In reversing the Oregon Court of Appeals, the Oregon Supreme Court announced a framework, adopted from the Ninth Circuit, for analyzing whether a defamatory statement is entitled to First Amendment protection. The first question is whether the statement involves a matter of public concern. If it does, then the dispositive question is whether a reasonable factfinder could conclude that the statement implies an assertion of objective fact. To answer that question, the following three-part inquiry must be applied: (1) whether the general tenor of the entire publication negates the impression that the defendant was asserting an objective fact; (2) whether the defendant used figurative or hyperbolic language that negates that impression; and (3) whether the statement in question is susceptible of being proved true or false.
Considering the content of the review as a whole, the Oregon Supreme Court held that a reasonable factfinder could not conclude that the defendant's review implied an assertion of objective fact; rather, the review expressed an opinion on matters of public concern that is protected under the First Amendment. On that basis, the Supreme Court concluded that the trial court properly dismissed the defamation lawsuit.
Earlier this month, Judge Edward M. Chen of the Northern District of California granted class action status to the plaintiffs in the on-going litigation against the popular ride-sharing app, Uber Technologies, Inc. The lawsuit was originally brought on behalf of three Uber drivers who claimed that Uber misclassified them as contract workers and improperly denied them employment-related benefits. The court's recent ruling expanded the lawsuit from three individual drivers to all Uber drivers in California, with the exception of those who executed a waiver of class action rights.
In opposition to the plaintiffs' motion for class certification, Uber argued that the drivers' employment classification cannot be adjudicated on a class-wide basis. Uber maintains that its right of control over its drivers, as well as the day-to-day reality of its relationship with them, are not sufficiently uniform across the proposed class. The court found that there was an inherent tension in Uber's argument -- on one hand, Uber claims that it has properly classified every single driver as an independent contractor, but on the other, Uber claims that each driver has a unique relationship with Uber such that the Court cannot make a class-wide determination of its drivers' proper job classification.
This high-profile decision highlights the increased scrutiny that is being placed on "sharing economy" companies that classify their workers as independent contractors rather than employees.
The decade-old Zubulake v. UBS case set off a seismic shift in electronic discovery that many lawyers and litigants still don't fully comprehend. One lesson many have learned the hard way is that the electronic discovery rules and practices that have been developed post-Zubulake must be a regular part of every organization's document management plans.
Zubulake was a standard employment discrimination lawsuit in the U.S. District Court for the Southern District of New York that is now seen as a turning point in electronic discovery. This article provides an excellent summary of Zubulake and its impact.
Increasingly, courts are disinclined to tolerate a party's failure to work cooperatively to minimize the cost of eDiscovery, as this plaintiff painfully discovered.
Give just a moment to consider your organization’s electronic document protocols. Processes should be in place long before any subpoena or request for records arrives. When your organization is hit with a lawsuit, what is the plan for preserving, requesting, organizing and producing documents?
The Litigation Technology Team at Ater Wynne manages electronic documents and eDiscovery for clients in litigation of all sizes, from small document collections with just one or two file types to large, complex sets involving terabytes of data, millions of documents, and dozens of file types. We utilize protocols and best practices developed in-house and multiple eDiscovery software platforms, keeping document management practices up-to-date and satisfying the courts' requirements.
In matters of eDiscovery, an ounce of prevention is better than a pound of cure. For more information about Ater Wynne’s Litigation Technology Team, contact Kara Lindsay, Chief Litigation Technology Specialist at firstname.lastname@example.org.
The Ninth Circuit Court of Appeals last week handed a trademark victory to Pom Wonderful, reversing a district court decision denying its request for an injunction against competitor Pur Beverages.
Pom Wonderful, maker of the popular POM pomegranate juice drinks, requested a preliminary injunction to bar the defendant from using the word “pŏm” for its pomegranate flavored energy drinks, as seen below.
The district court denied the request, stating that Pom Wonderful did not establish a likelihood of confusion between the marks.
On review, the Ninth Circuit focused on the Sleekcraft factors for likelihood of confusion. Regarding the physical similarities of the marks, the Ninth Circuit found far more in common between the marks than not. “Balancing the marks’ many visual similarities, perfect aural similarity, and perfect semantic similarity more heavily than the marks’ visual dissimilarities – as we must – the similarity factor weighs heavily in Pom Wonderful’s favor.” Furthermore, when considering this factor, strong marks are given greater weight than weak marks. As such, the district court clearly erred by giving more weight to the marks’ differences than their similarities.
The district court also erred in its “brick-and-mortar” trade channels analysis. “Because Pom Wonderful and Pur sell highly similar products in supermarkets located across the country, the marketing channel convergence factor weighs in Pom Wonderful’s favor. The district court clearly erred in . . . requiring Pom Wonderful to prove that its beverages were sold in the very same brick-and-mortar stores as Pur’s ‘pŏm’ beverage.” Though a perfect overlap of retailer locations increases likelihood of consumer confusion, its absence does not undermine the convergence of the marketing channels.
Finally, the district court mistakenly weighed the remaining factors – actual confusion, defendant’s intent, and product expansion –against Pom Wonderful. The absence of any evidence supporting these factors is to be considered merely neutral in a likelihood of confusion analysis.
In weighing the totality of the factors, the Ninth Circuit review revealed that five of the Sleekcraft factors weighed in favor of Pom Wonderful, none weighed in favor of Pur Beverages, and three factors were neutral. Since the district court’s errors created a ripple effect, influencing its decision regarding the remaining preliminary injunction requirements, the Ninth Circuit reversed and remanded.
The Oregon Supreme Court held last week that the attorney-client privilege applies to communications between a law firm's lawyers and the firm's in-house counsel. In Crimson Trace Corp. v. Davis Wright Tremaine LLP, plaintiff sued its lawyers for malpractice, and sought discovery of communications between the defendant lawyers and a group of firm lawyers designated as in-house counsel. Those internal communications had occurred when a potential conflict of interest arose between the client and its lawyers.
The trial court held that the communications were discoverable and were not subject to the attorney-client privilege, adopting a "fiduciary exception" to Oregon Evidence Code 503, which sets out the scope of the privilege. According to the fiduciary exception, a law firm's fiduciary obligations to its clients prevent it from invoking the privilege to protect its lawyers' communications with in-house counsel. Justice Landau, writing for the Supreme Court, concluded that the fiduciary exception is not supported by the plain language of Rule 503, and that the internal law firm communications in that case were protected by the privilege.
The Oregon Court of Appeals recently held that a business owner can pursue a defamation claim against an individual who posted a negative on-line review. In Neumann v. Liles, plaintiff, who operates a wedding venue, was the target of a review on google.com calling her, among other things, "two faced, crooked, and . . . rude." She sued the author of the review, who had been a guest at a wedding hosted at plaintiff's venue.
The on-line critic in response filed a "special motion to strike" under Oregon's SLAPP statute. SLAPP stands for "strategic lawsuit against public participation," and the anti-SLAPP statute creates a procedure for dismissing at an early stage an unfounded lawsuit designed to quash speech or activism on issues of public interest. While the statute protects certain speech-related activities, it does not shield defendants who engage in defamatory speech.
According to the Court of Appeals, the trial court should not have granted the anti-SLAPP motion to strike the complaint because plaintiff had offered sufficient evidence that the review was in fact defamatory. While defendant claimed that the review represented his opinion and was merely "figurative, rhetorical, or hyperbolic," the Court of Appeals concluded that most of the post was "nonrhetorical and factual" and contained specific, potentially defamatory, statements about plaintiff's honesty and business ethics. Accordingly, the trial court should have allowed the case to proceed to trial.
Last week the Oregon Court of Appeals weighed in on an issue being litigated around the country by homeowners who have defaulted on their mortgages: whether a nonjudicial foreclosure can occur where there has been no recorded assignment to the party seeking to foreclose. In Niday v. GMAC Mortgage, LLC, the defaulting homeowner filed suit to stop a foreclosure, claiming that the holder of the promissory note was not the original lender, and that the assignment of the note had not been recorded with the county.
At issue was the Mortgage Electronic Registration System, Inc. -- known as MERS -- which lenders have used for nearly 20 years to track electronically the transfer of beneficial interests in loan obligations. Lenders using the MERS system do not record the sale or assignment of a beneficial interest because MERS remains in place as the "beneficiary" of a trust deed notwithstanding the sale or assignment.
The Court of Appeals, interpreting Oregon's 1959 law allowing foreclosure by a private, advertised trustee's sale rather than through a court-ordered foreclosure, held that a nonjudicial foreclosure cannot occur if an assignment of the beneficial interest was not recorded. The Court rejected the argument by MERS that, even though it was not the lender or a successor to the lender, foreclosure was proper because it had been designated as beneficiary of the trust deed when the homeowner took out the loan.
There was evidence in Niday that the lender assigned its interest in the trust deed without recording the assignment, and the Court of Appeals ordered a trial on whether the predicates to nonjudicial foreclosure had been satisfied.
The day after the Court of Appeals issued the opinion in Niday, the Oregon Supreme Court accepted a certified question from the U.S. District Court in a case also addressing nonjudicial foreclosures of mortgages tracked by MERS.