Other Barks & Bites for Friday, July 21: Second Circuit Says Derivative Works Can Cover Unregistered Material, Surrey Hotel Trademark Not Conveyed by Sale, and 9,000+ Authors Ask for Generative AI Compensation

This week in Other Barks & Bites: government officials from the European Union and United States celebrate a milestone for the EU-U.S. Data Privacy Framework; the Second Circuit rules that copyright registrations containing a derivative work can serve as a basis for infringement claims involving elements of previously unregistered material incorporated into the later registration; Judge Orrick indicates that he may dismiss a lawsuit brought by artists against generative AI companies while more than 9,000 writers sign an Authors Guild letter seeking compensation from generative AI platforms; the Second Circuit rules that the sale of the Surrey Hotel did not convey common law trademark rights to the hotel’s name; and the future of electric vehicle battery factories becomes a sticking point in United Auto Worker labor negotiations.

Bites 

FTC, DOJ Merger Guidelines Target Effects of Platform Acquisitions on Competition – On Wednesday, July 19, the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) released an updated draft of merger review guidelines implemented by both agencies when reviewing mergers for compliance with federal antitrust laws. Among the 13 guidelines enumerated by the draft are mergers involving multi-sided platforms, like those offered by Big Tech companies, which would be scrutinized for their effects on competition with other platforms and platform displacement.

Nine-Thousand+ Writers Sign Authors Guild Letter Seeking Compensation from Generative AI – On Tuesday, July 18, the Authors Guild submitted an open letter signed by more than 9,000 authors to several tech companies with generative artificial intelligence (AI) platforms, including OpenAI and Meta Platforms, urging those companies to obtain permission for the use of copyrighted works in training data sets and to compensate authors for the use of their works in training generative AI platforms as well as for the outputs produced by those platforms.

House IP Subcommittee Debates Right to Repair, Copyright TPMs – On Tuesday, July 18, the House Judiciary’s Subcommittee on Courts, Intellectual Property and the Internet held a hearing regarding the right to repair in the copyright context, assessing the appropriateness of technological protection measures (TPMs) in industries like automotive where consumers have traditionally been able to repair devices themselves. While the day’s witness panel was largely friendly to the right to repair community, pro-copyright advocate Devlin Hartline noted that the use of TPMs by copyright owners is not an anti-competitive practice requiring additional limits to current copyright law.

Second Circuit Says Registration of Derivative Work Also Covers Prior Unregistered Material – On Monday, July 17, the U.S. Court of Appeals for the Second Circuit issued a ruling in Enterprise Management Ltd., Inc. v. Construx Software Builders, Inc. in which the appellate court ruled as a matter of first impression that an author’s registration of a derivative work also registers previously unregistered material incorporated into the later derivative work. Under this reasoning, organizational management firm Enterprise had a viable alternative infringement theory over claims that Construx had infringed an organizational success chart that may have been included in a prior group registration, but also has elements incorporated into later charts that were registered by Enterprise with the U.S. Copyright Office.

Ninth Circuit Affirms Ruling That Instagram Embedded Photos Don’t Infringe Under Perfect 10 – On Monday, July 17, the U.S. Court of Appeals for the Ninth Circuit issued a ruling in Hunley v. Instagram, LLC in which the appellate court affirmed the Northern District of California’s ruling that Instagram was not liable for copyright infringement for enabling third parties to embed infringing photos in their Instagram posts. The Ninth Circuit agreed with the district court that the circuit court’s ruling in Perfect 10 v. Amazon (2007) precluded relief for the plaintiff photographers as Instagram did not “display a copy” of the photo in a way that gave rise to infringement.

EU, U.S. Officials Celebrate Recognition of Data Privacy Framework’s Adequacy – On Monday, July 17, Attorney General Merrick Garland, Commerce Secretary Gina Raimondo and European Commissioner for Justice Didier Reynders appeared at a meeting of the U.S. Department of Justice to discuss the impact of the European Union’s recent recognition of the adequacy of the EU-U.S. Data Privacy Framework, which provides a new legal framework for personal data security in transatlantic data flows that represent more than $7 billion in cross-border trade.

Barks

Judge Orrick Seeks More Particularity in Artists’ Copyright Claims Against Generative AI – On Wednesday, July 19, U.S. District Judge William Orrick III of the Northern District of California held a hearing on a motion to dismiss filed in a lawsuit brought by artists against generative AI companies Stability AI, Midjourney and DeviantArt, during which Judge Orrick indicated that he was likely to grant the motion and give the plaintiffs an opportunity to amend their complaint to allege their claims with more particularity based on source code made available by the generative AI companies.

Innovation Alliance Presents ‘Champion of the Inventor’ Awards to Sen. Tillis, Rep. Johnson – On Tuesday, July 18, R&D tech company coalition Innovation Alliance announced that it had presented Senator Thom Tillis (R-NC), Ranking Member of the Senate Judiciary’s IP Subcommittee, and Representative Hank Johnson (D-GA), Ranking Member of the House Judiciary’s IP Subcommittee, with “Champion of the Inventor” awards to recognize their contributions to promoting American innovation at our nation’s legislature.

Second Circuit Rules That December 2020 Sale Did Not Convey Surrey Hotel Trademark – On Monday, July 17, the Second Circuit issued a summary order in Surrey Propco LLC v. Denihan Ownership Co., LLC in which the appellate court affirmed the Southern District of New York’s ruling that Surrey Propco did not obtain common law trademark rights to “THE SURREY” mark during its December 2020 purchase of the Surrey Hotel from Denihan such that it can prevent Denihan from continuing to use that mark.

Tesla Sues Australian Battery Company in Face of Open Patent Pledge – On Friday, July 14, energy company Tesla, which in 2014 pledged to avoid filing lawsuits against any companies practicing its patented technologies “in good faith,” filed a lawsuit in the Eastern District of Texas against Australian battery developer Cap-XX on claims of patent infringement related to electric vehicle capacitors.

This Week on Wall Street

Transition to Electric Vehicles Becomes Sticking Point in UAW Labor Negotiations – On Friday, July 21, business news outlet CNBC reported that labor negotiations between United Auto Workers (UAW) and major American automakers have slowed in large part because the union representing America’s autoworkers wants to discuss employment contracts at electric vehicle battery factories, while car companies insist those facilities are run by joint ventures outside of the purview of UAW negotiations.

Quarterly Earnings – The following firms identified among the IPO’s Top 300 Patent Recipients for 2022 are announcing quarterly earnings next week (2022 rank in parentheses):

• Monday: NXP Semiconductors N.V. (91st)
• Tuesday: 3M Co. (t-85th); Alphabet, Inc. (15th); Corning Inc. (89th); Danaher Corp. (t-248th); Dow Inc. (126th); Fujitsu Ltd. (67th); General Electric Co. (28th); General Motors Co. (57th); Microsoft Corp. (18th); Texas Instruments Inc. (48th); Visa Inc. (141st); Xerox Holdings Corp. (176th)
• Wednesday: Airbus SE (82nd); Amazon.com, Inc. (16th); AT&T Inc. (47th); Boeing Co. (t-36th); eBay Inc. (179th); Meta Platforms, Inc. (42nd); Nissan Motor Co., Ltd. (145th); Samsung Electro-Mechanics Co., Ltd. (t-94th); Seagate Technology plc (t-184th); TE Connectivity, Ltd. (t-177th); United Microelectronics Corp. (182nd)
• Thursday: Boston Scientific Corp. (88th); Comcast Corp. (104th); Denso Corp. (38th); Ford Motor Co. (27th); Fuji Electric Co., Ltd. (206th); Honeywell International Inc. (56th); LG Corp. (3rd); Omron Corp. (t-173rd); Renesas Electronics (224th); Samsung Electronics Co., Ltd. (1st); Samsung SDI Co., Ltd. (151st); Shin-Etsu Chemical Co., Ltd. (t-203rd); STMicroelectronics N.V. (77th); Textron Inc. (t-170th)
• Friday: Exxon Mobil Corp. (156th); Fanuc Corp. (101st); Hitachi, Ltd. (20th); Komatsu Ltd. (t-246th); Mediatek Inc. (107th); NEC Corp. (39th); Sanofi S.A. (t-210th)

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Author: damedeeso