Amazon Sued by Amazon Prime Now Drivers

Amazon recently introduced its same day delivery service to certain markets in the United States.  Using Amazon Prime Now, a consumer can order a product whether on the web or with an app and have that product delivered that day within two hours.

Amazon Prime Now drivers are now suing concerning their classification as independent contractors.  The plaintiff’s in the case claim that they are required to wear Amazon Prime Now shirts and hats, they are required to carry phones provided by Amazon, the company sets their shifts, directs how they make their deliveries, including their routes, and generally controlled how they made their deliveries.

Under IRS guidelines, determining whether a worker is an independent contractor or employee is controlled by factors, the most significant of which is whether the company has the right to control how the worker does their job. Factors looked include when and where the work is conducted, who provides the tools to do the work, how the work is accomplished, who determines where to purchase supplies, who determines who to hire to assist with the work, and the means and manner of how the work is performed.

Being labeled an employee can cause the employer to be liable for federal and state tax withholding, anti-discrimination laws, health care benefits, pension, worker’s compensation and unemployment insurance.

In the lawsuit, the workers are claiming that Amazon is improperly classifying them as independent contractors when they are in fact employees of the company.  The workers are seeking employee benefits such as minimum wage payment, overtime pay, meal breaks and reimbursement for work-related expenses.

Similar lawsuits have been brought against companies such as FedEx, Uber, GrubHub and Lyft.

For example, a class action lawsuit against FedEx resulted in a $228 million dollar settlement.  In that case, FedEx ground drivers sued claiming that they were wrongfully classified as independent contractors when they were in fact employees.  FedEx had been shifting the costs of its trucks, uniforms, fuel, maintenance, insurance and more onto its workers.  The drivers also did not receive overtime pay, rest periods, missed meals and the like.  This, despite the fact that FedEx had ultimate control over the drivers and the means and manner in which they performed the work.


Pinterest Loses Trademark Lawsuit

Pinterest, the social media photo sharing site, attempted to prevent Pintrips, a travel planning site, from using their mark as the mark contained the term “Pin”. Pinterest claimed that Pintrips registered a confusingly similar name to their famous or well-known mark.  In the lawsuit brought under the Lanham Act covering trademark use and registration, Pintrips claimed that it came up with its name independently of the Pinterest mark.

The Lanham Act prohibits the use in commerce of any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin that is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods.  15 U.S.C §1125(a)(1)(A).

To show infringement based on the Lanham Act it must be shown that there is a valid, protectable ownership interest in a trademark, the owner is the first user of the mark, and that the alleged infringer’s use is likely to cause confusion in the marketplace.

The court in this case looked to whether consumers were likely to believe that Pintrips was “somehow affiliated with or sponsored by” Pinterest”.

The Court looked to the Ninth Circuit AMF Inc. v. Sleekcraft Boats case, which lists 8 factors affecting likelihood of confusion.  1)  the strength of the allegedly infringed mark; 2) the similarity/proximity of the parties’ goods; 3) the similarity of the trademarks; 4) the extent to which there is evidence of actual confusion; 5) the marketing channels used by the parties; 6) the degree of care likely to be exercised by consumers when choosing the products (based on the principal that the longer a consumer would take considering a product, the less likely there is to be confusion); 7) the alleged infringer’s intent in choosing its trademark; and 8)  the likelihood of expansion of the parties’ product lines.

The judge found that while the marks were similar, the term “pin” is a verb with a common and well-known meaning.  At the time that Pintrips came up with its name, Pinterest was not yet famous but was merely an invitation only website.  Pinterest also offers no travel booking function such that the services provided differ.

Pinterest also claimed that the use of Pintrips diluted the Pinterest trademark under the Lanham Act.  The judge also rejected this claim.  Trademark applies to famous marks and as of 2011 and 2012, Pinterest was not yet a famous mark to be entitled to a dilution claim.

Pinterest attempted to prove consumer confusion by presenting the court with surveys.  However, judge Gilliam stated that it was impossible to tell that there was confusion revealed by the surveys.

The judge overall found that the use of the Pinterest mark was a fair use under the Lanham Act.

The main issue in the case was convincing the court that Pintrips did not choose its name to benefit from the goodwill of the Pinterest mark.  Judge Gilliam found “No evidence was introduced at trial that suggested that the Pintrips mark was selected to take advantage of Pinterest’s brand recognition” rather “In fact, no evidence suggests that Pinterest had a substantial brand recognition as of June 2011 that Pintrips would want to appropriate.”

US Court of Appeals for the Ninth Circuit Amazon Trademark Decision

The US Court of Appeals for the Ninth Circuit has changed its decision in the case of Multi Time Machine v.  In the case, Multi Time Machine sued Amazon because when potential customers searched for its products, its competitors would also be listed by Amazon.

Multi Time Machine sold higher-end watches on  Multi Time Machine claimed that the search results returned by Amazon, which included competitor’s watches, caused confusion in the marketplace.  Previously, trademark owners filed lawsuits concerning keyword advertising where a competitor uses their competition’s trademark in search terms to attract the competitor’s customers.  These cases were very difficult to win.  Similarly, but more clear trademark violations were competitors registering the domain names of their customers and linking the domains to their own websites.  In these cases the World Intellectual Property Organization created a domain name dispute arbitration system which allowed for the cancellation of domain names registered in bad faith – which included using another’s trademark to lead customers to the businesses website.

The original decision in this case stated that there was a likelihood of confusion in the marketplace from Amazon’s search results. The court in the initial decision apparently relied on “initial interest” customer confusion.  Under the initial interest confusion doctrine an infringement action can be brought when there is confusion prior to the time of purchase, which does not rely on likelihood of confusion.  It is the fact that the mark initially catches the consumer’s attention, such that the customer could be led to purchase that product rather than the product they were searching for.  Initial confusion can occur regardless of whether the customer ultimately purchases the original product he or she was searching for.  An example used in the case was a billboard stating the name of one company but when the consumer follows the directions on the billboard they arrive to the competitor’s store.

The court in the second decision stated “Amazon is responding to a customer’s inquiry about a brand it does not carry by doing no more than stating clearly (and showing pictures of) what brands it does carry.”  The court found that there was no evidence of confusion by any consumer.

Many large tech companies filed amicus curiae briefs supporting the Amazon decision noting that modern day Internet search differs significantly to search for a product in a brick-and-mortar store.

Hershy’s Cake Pan Trademark Dilution

If you search on the Internet for Hershey’s Cake Pan a number of products come up.  You can buy a Hershey’s Chocolate Bar Style Cake Pan in Silicone or a Hershey’s Kiss shaped silicone pan.  On the packaging for the cake pan it states “The Hershey’s Trademarks and Trade Dress are Used Under License”.  When used to make a cake, the final product comes out bearing the Hershey’s trademark.

So if a baker were to purchase this pan would they be allowed to sell “Hershey’s” branded cakes? Or Hershey’s Kiss shaped cakes?  And could Hershey’s stop them as it has impliedly and on the packaging granted a license to use these trademarks and trade dress.

Usually when a company licenses its trademarks to a third-party it is required to maintain certain quality controls over the company using the mark.  The licensor must ensure that the licensee doesn’t do anything to tarnish the brand or lessen the distinctiveness of the trademark.  A “naked” trademark license is one in which the licensor allows the  licensing to do whatever they want with the trademark, which can lead to major problems for the trademark owner.

Allowing third parties to use the Hershey’s trademark in any way they want in baking, if considered a naked license, could actually constitute abandonment of its mark, which is certainly not Hershey’s intention.  A naked license shows that the trademark owner did not exercise sufficient control over the licensee such that the trademark no longer represents the quality of the goods which consumers have come to expect from Hershey’s.

In litigation, courts will look to whether there was a contract requiring the licensee to act in certain ways to maintain the distinctiveness of the mark and whether the licensor had the right to control how the licensee used its mark.  Courts will also look to whether the trademark owner took sufficient steps to ensure that the licensee maintained the quality and distinctiveness of the mark.   Failure to do the foregoing can result in a company, like Hershey’s to lose the exclusive right to use their trademark.  This was clearly not the intent of Hershey’s in releasing its branded cake trays.

Hershey’s, however, cannot reasonably or feasibly control how the users of its cake pans will use the resulting products branded as “Hershey’s”.  Clearly, a home use would not infringe on Hershey’s marks.  However, if home users begin selling “Hershey’s branded products at bake sales, this could become a problem.  As in the example above, if a baking or catering company were to begin selling “Hershey’s” branded products, this would also hurt Hershey’s trademark.

Hershey’s can also be considered to be diluting its own trademark rights.  Trademark Dilution is is when the use of another’s mark lessens the distinctiveness of a famous trademark in the minds of consumers.  Hershey’s is clearly a famous or well-known mark.  The types of trademark dilution are blurring and tarnishment.  Tarnishment would occur when a home user of the Hershey’s cake pan adds designs to the cake and sells the to the public, who understands the designs to be those of Hershey’s.  Perhaps a new form of cake is created using insects, something that Hershey’s has not yet done or tested.  Consumers who did not like these products would associate their dislike with the Hershey’s brand.

With respect to blurring, this would be the weakening of the Hershey’s mark by negative association with the brand.  If home bakers are selling product with the Hershey’s branded logo, consumers might make the association between the brand and the inferior product.  Whereas Hershey’s would conduct tests and consumer surveys to determine whether a new product is viable and supports their brand, allowing any purchaser of one of the Hershey’s baking pans allows any variation of product bearing the Hershey’s logo – and Hershey’s, without a lawsuit or a strongly worded cease and desist letter, has no control over this.

In all, why this may seem a dubious way to increase Hershey’s brand awareness by selling pans that create cakes or cupcakes with the Hershey’s logo, in reality unless a commercial use is made of these pans it is unlikely that there will be litigation concerning this matter.  On can definitely see Hershey’s suing over a bakery selling cakes with the Hershey’s trademark (even though a license is granted on the packaging), but it seems unlikely that Hershey’s would go over the general consumer use, even through small sales of the products.  Then again, this might be true, as I am aware of a major comic book conglomerate suing a small hut in Brazil which had hand made paintings of certain comic book heroes.

Hershey’s is such a well-known and famous brand that they will likely have no problems with their branded cake pans and the like.  However, the decision to do so must have come with the realization that they might have been creating potential legal problems for themselves in the future.  But of course, they can handle them as they come up.

No Copyright in Yoga Moves

The U.S. Court of Appeals for the Ninth Circuit has held that yogi Bikram Choudhury’s yoga moves cannot be copyrighted.  The yogi had attempted to register a series of 26 yoga poses to prevent other yoga studios from using the moves, presumably without license.  The yogi is well-known for his “hot” yoga, which is performed in a 105 degree Fahrenheit room.  The yogi had apparently been preventing other studios from using the moves by sending out cease and desist letters to companies too small to defend themselves.

The court found that the moves constituted an idea, and not an expression of that idea, and were therefore not copyrightable.  Judge Wardlaw in the case wrote that the yogi trying to copyright his moves actually went against his business interests.  The judge stated “Consumers would have little reason to buy Choudhury’s book if Choudhury held a monopoly on the practice of the very activity he sought to popularize.”

According to Judge Wardlaw “Copyright protects only the expression of this idea – the words and pictures used to describe the sequence – and not the idea of the sequence itself.”.  Wardlaw continued “although there is no cause to dispute the many health, fitness, spiritual and aesthetic benefits of yoga, and Bikram Yoga in particular, they do not bring the sequence into the realm of copyright protection.”

Interestingly, the Copyright Act does provide protection for choreography, which arguably this set of yoga moves is – the expression of ideas.  However, other courts have held that ideas similar to the yoga move ideas, such as meditation, were not protected by copyright.  If yogi Choudhury had been successful, copyright might have been opened up to a number of other specialized movements which could be called choreography, such as surgical procedures or specialized routines for brushing one’s hair.

The court here noted that the purpose of copyright is to promote the progress of science and the arts.  By preventing other studios from using these moves it is difficult to see how progress in the arts and sciences would be promoted.  The decision is also contrary to a previous copyright dispute involving yogi Choudhury in which he stated “I win, he lose, and that’s it..Nobody will ever be able to steal Bikram yoga anymore.”

Also interestingly, the court noted that the series of yoga moves might be patentable, but did not rule on whether the moves would be entitled to patent protection.

In any event, yogi Choudhury retains copyright on his books, DVDs and other actual expressions of his yoga moves.  He also owns the trademark on the name BIKRAM YOGA covering, inter alia, “Educational services, namely, conducting classes, seminars, conferences, and teacher training in the field of yoga instruction, yoga philosophy, yoga theory and practice, allopathic physical systems, integration of medical and yogic systems, yoga therapy, marketing of yoga instruction, physical fitness, [ medication ] * meditation *, mental training and discipline, and health, and distribution of course material in connection therewith” in International Class 41.