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Exploring the Latest in Intellectual Property Law
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Time’s Up: Fifth Circuit Reinstates Original Judgment in Trademark Dispute

by | Dec 5, 2024 |

The US Court of Appeals for the Fifth Circuit vacated a district court’s amended final judgment and reinstated its prior final judgment, finding that the district court overstepped its narrow mandate on remand, directly contradicting the Fifth Circuit’s earlier decision. In that earlier decision, the Fifth Circuit upheld the district court’s finding of trademark infringement but modified the scope of the injunction, approving it only in part. Rolex Watch USA, Incorporated v. BeckerTime, L.L.C., Case No. 24-10415 (5th Cir. Nov. 20, 2024) (Douglas, King, Willett, JJ.)

BeckerTime modified and sold Rolex-branded watches by adding diamonds, aftermarket bezels, and bands not authorized by Rolex. Rolex sued BeckerTime for trademark infringement, seeking an injunction and disgorgement of profits. While the district court found that BeckerTime infringed Rolex’s trademark, it declined to order disgorgement because of BeckerTime’s laches defense. In the first appeal, the Fifth Circuit upheld the infringement finding, noting that BeckerTime’s modifications of diamonds and aftermarket bezels went beyond mere repairs and restoration. However, the Fifth Circuit partially modified the district court’s injunction and issued a limited remand to clarify certain language in the injunction. On remand, Rolex and BeckerTime agreed on revised language for that portion of the injunction, which the district court approved. The district court, however, went further by amending other sections of the injunction. This appeal followed.

Both parties agreed that the district court had exceeded its mandate. The amendments permitted BeckerTime to advertise and sell Rolex watches with customized dials under certain conditions, requiring disclosures and inscriptions reading “CUSTOMIZED BY BECKERTIME.” Rolex contended – and the Fifth Circuit agreed – that this language conflicted with the prohibition (in the injunction) of all non-genuine dials, including those bearing original Rolex trademarks.

The Fifth Circuit vacated the district court’s amended judgment and reinstated its prior judgment with modifications, incorporating its earlier decision and the parties’ stipulation.



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Trademark Fee Increases: The TEAS Party Is Over

by | Dec 5, 2024 |

After a lengthy public comment and review process, the US Patent & Trademark Office (PTO) announced trademark fee increases effective January 18, 2025. The goal of PTO fee setting is to provide sufficient financial resources to facilitate the effective administration of the US intellectual property system. The PTO aspires to recover aggregate costs to:

  • Finance the PTO’s mission, strategic goals, and priorities.
  • Enable financial sustainability.
  • Promote efficient operations and filing behaviors.
  • Align fees with the costs of services provided.
  • Encourage access to the trademark system for all stakeholders.

The fees for filing a new trademark application via either the Trademark Electronic Application System (TEAS) or TEAS Plus will remain unchanged: $350 per class for a TEAS standard application and $250 per class for a TEAS Plus application for as long as TEAS remains available (and then using the Beta site discussed below). However, the PTO will institute surcharges for applications that are incomplete or contain custom identifications of goods or services. These application surcharges are intended to encourage more complete applications, which will improve examination efficiency and help reduce pendency.

Description Surcharge Insufficient information (Sections 1 and 44), per class $100 Using the free-form text box instead of the Trademark ID Manual within the Trademark Center to identify goods and services (Sections 1 and 44), per class $200 Each additional group of 1,000 characters in the free-form text box beyond the first 1,000 (Sections 1 and 44), per affected class $200

Since the World Intellectual Property Organization (WIPO) is currently unable to collect surcharges, the PTO will raise the fee for WIPO Madrid Trademark Applications to $600 per class.

The PTO will also raise the fees for post-registration filings to offset higher processing costs for these filings and continue balancing the cost of base applications.

Filing Current Fee Fee as of January 18, 2025 Section 9 registration renewal application, per class $300 $325 Section 8 declaration, per class $225 $325 Section 15 declaration, per class $200 $250 Section 71 declaration, per class $225 $325

The PTO has not increased the filing fees in connection with intent to use filings since 2002, although the time to examine such filings has increased exponentially because of the need to examine questionable specimens. Those fees are now set to increase as follows:

Description Current Fee Fee as of January 18, 2025 Amendment to allege use (AAU), per class $100 $150 Statement of use (SOU), per class $100 $150

The fees for requesting an extension of time are unchanged.

Finally, the number of petitions and protests have increased. The PTO will attempt to recover more of the cost of processing petitions and protests as follows:

Description Current Fee Fee as of January 18, 2025 Petition to the Director $250 $400 Petition to revive an application $150 $250 Letter of protest $50 $150

For further details, including a complete list of the fee increases, click here.

The PTO also announced that as of January 18, 2025, filers [...]

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Chill Out: Request for Profit Disgorgement Isn’t Entitled to Jury Trial

by | Dec 5, 2024 |

The US Court of Appeals for the Eighth Circuit affirmed a district court ruling that a plaintiff was not entitled to a jury trial regarding its trade dress infringement claim and that the plaintiff failed to prove that its trade dress had acquired the required secondary meaning. National Presto Industries Inc. v. U.S. Merchants Financial Group Inc., Case No. 23-1493 (8th Cir. Nov. 12, 2024) (Loken, Erickson, Grasz, JJ.)

National Presto manufactures household appliances, including personal electric heaters sold under the brand name “HeatDish” since 1989. These heaters had “a parabolic design that looked like a satellite dish.” National Presto supplied HeatDish heaters to Costco for many years. However, amid slumping sales, Costco began exploring alternative options. In 2017, Costco requested a “parabolic electric heater that was UL approved, had high heat, and looked industrial and robust” from another supplier, U.S. Merchants Financial Group. U.S. Merchants began development of a heater named “The Heat Machine.” Costco requested modifications to the initial design, including “changes focused on a comparison with Presto’s HeatDish.” Costco began selling The Heat Machine in 2018.

In December 2018, National Presto filed suit against U.S. Merchants asserting trade dress infringement under the Lanham Act. National Presto requested both injunctive relief and that U.S. Merchants “be required, pursuant to 15 U.S.C. § 1117, to account to National Presto for any and all profits derived by them, either individually or jointly to be ordered to disgorge, and be ordered to pay all damages sustained by National Presto by reason of Defendant’s actions complained herein.”

National Presto sought a jury trial for its trade dress claim, but the district court ruled that National Presto was seeking equitable relief and thus was not entitled to a jury trial. The district court noted that under the Lanham Act, courts generally “find that a claim for disgorgement of an infringer’s profits is an equitable claim” and therefore the Seventh Amendment does not provide the right to a jury trial for such a claim. After a bench trial, the district court ruled that National Presto failed to prove infringement because its trade dress had not acquired secondary meaning. National Presto appealed.

The Eighth Circuit affirmed. Regarding the denial of a jury trial, which the Court reviewed de novo, National Presto argued that “disgorgement is considered a legal claim when the infringer’s profits serve as a ‘proxy’ for the plaintiff’s damages.” Although the district court did not reject that legal theory, it found that the facts National Presto presented were not sufficient to support a finding that the profits were in fact serving as a proxy. The Court rejected several of National Presto’s arguments, including that “Presto’s desired remedy was legal rather than equitable because its aim was compensation rather than disgorgement of unjust enrichment.”

Regarding the district court’s secondary meaning finding, which the Eighth Circuit reviewed for clear error, the Court noted that “the chief inquiry is whether in the consumer’s mind the mark has become associated with a particular source.” In rejecting National [...]

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PTO Proposes Additional Audits to Put “Specimen Farms” Out to Pasture

by | Nov 14, 2024 |

In response to reports that some registrants use fraudulent specimens to prove continued use in commerce, the US Patent & Trademark Office (PTO) proposed an update to its post-registration audit process. Changes in Post-Registration Audit Selection for Affidavits or Declarations of Use, Continued Use, or Excusable Nonuse in Trademark Cases, 89 Fed. Reg. 85,435 (Oct. 28, 2024).

Since its institution in 2017, the PTO’s post-registration audit process has been essentially random. Pursuant to Section 8 of the Trademark Act, trademark owners are required to file documentation in the form of affidavits of continued use indicating that the marks remain in use in connection with goods or services covered by the registration. In turn, the public relies on the trademark register for notice of marks that may be available for use and registration. The PTO conducts random audits of submitted documentation to ensure its reliability.

Since encountering various filings that revealed “systemic efforts to subvert” a trademark’s use in commerce requirement, the PTO has taken steps to expand its audit program. For example, in 2019, the office amended its examination procedures to highlight “digitally created/altered or mockup specimens” that fraudulently indicate continued use in commerce. In 2021, the PTO became aware of “specimen farms,” which are websites designed to create the illusion of commerce without providing actual sales. To combat deceptive maintenance of obsolete marks, the PTO will no longer perform only randomized audits but will also conduct audits “directed” at items that show tell-tale signs of digital alteration or specimen farm website use.

The objective of the directed audit program is “to promote the accuracy and integrity” of the trademark register. This proposed policy is open for public comments on the Federal eRulemaking Portal until November 27, 2024.



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“Conquesting”: Use of Rival’s Name as Keyword Search Term Isn’t Actionable Under Lanham Act

by | Nov 7, 2024 |

Noting how rare it is for trademark infringement cases to be decided on summary judgment, the US Court of Appeals for the Ninth Circuit affirmed a district court’s grant of summary judgment finding that the plaintiff law firm failed to establish a likelihood of consumer confusion by virtue of the defendant’s purchase of a keyword search term. Lerner & Rowe PC v. Brown, Engstrand & Shely, LLC, et al., Case No. 23-16060 (9th Cir. Oct. 22, 2024) (Desai, de Alba, JJ.; Chen, Dist. J, sitting by designation) (Desai, J., concurring).

The parties in this matter are rival personal injury law firms based in Arizona. Lerner & Rowe, PC, is the larger of the two firms. It has 19 offices and has spent more than $100 million promoting its brand and trademarks in the state. Brown, Engstrand & Shely, LLC, does business as The Accident Law Group (ALG). From 2015 to 2021, ALG engaged in an internet advertising strategy called “conquesting,” whereby companies promote themselves to potential customers who search for a competitor on the internet. ALG purchased the term “Lerner & Rowe” as a keyword search term so that whenever someone searched for that term, ALG’s advertisements would appear near the top of the search results list. The ALG advertisements themselves never included the term “Lerner & Rowe.”

In 2021 Lerner & Rowe filed a complaint alleging federal and state trademark infringement, unfair competition, and unjust enrichment claims. In 2023 the district court granted summary judgment in favor of ALG as to the trademark infringement and unjust enrichment claims but denied summary judgment on the unfair competition claims. ALG moved for reconsideration, and the district court subsequently granted summary judgment as to all the claims. Lerner & Rowe appealed.

Because there was no dispute that Lerner & Rowe had a protectable interest in its marks, the Ninth Circuit’s trademark infringement analysis focused on assessing the likelihood of consumer confusion. At issue here was “initial interest confusion,” confusion that arises when an alleged infringer uses a competitor’s mark to direct attention to its own product. The Ninth Circuit used the four-factor test articulated in its 2011 decision in Network Automation v. Advanced Sys. Concepts to analyze likelihood of confusion in a keyword advertising context:

  • Strength of the mark.
  • Evidence of actual confusion.
  • Type of goods and degree of care likely to be exercised by the purchaser.
  • Labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page.

Other less relevant factors include “the proximity of the goods, similarity of the marks, marketing channels used, defendant’s intent in selecting the mark, and likelihood of expansion of the product lines.”

The Ninth Circuit found, and ALG did not dispute, that Lerner & Rowe’s mark was strong, but the Court concluded that the other three factors favored ALG. As to evidence of actual confusion, Lerner & Rowe offered 236 phone calls received by ALG in which the caller mentioned Lerner & Rowe by name when asked [...]

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Clear Vision: Keyword Search Term Purchase Doesn’t Blur Trademark Lines

by | Oct 17, 2024 |

Addressing the issue of trademark infringement based on the purchase of search advertising keywords, the US Court of Appeals for the Second Circuit joined the consensus view and upheld a district court decision finding that the mere purchase of a search advertising keyword containing another’s trademark does not by itself constitute trademark infringement. 1-800 Contacts, Inc. v. JAND, Inc., Case No. 22-1634 (2d Cir. Oct. 8, 2024) (Chin, Carney, Lee, JJ.)

1-800 Contacts is an established online retailer for contact lenses. JAND (doing business as Warby Parker) was originally an online retailer for eyeglasses and began selling contact lenses online as well in 2019. As a newcomer to the market of online contact lenses, Warby Parker purchased search advertising keywords that included 1-800 Contacts’ trademarks. This practice is known as search keyword advertising, and it is a type of marketing that allows parties to purchase certain terms from search engines that, when used as a search query, result in the paying party’s advertisements appearing above the organic search results as part of the “paid results.”

1-800 Contacts sued Warby Parker for engaging in this practice, alleging that the purchase and use of 1-800 Contacts’ trademarks constituted trademark infringement and unfair competition under federal and New York state law. The district court disagreed, granting Warby Parker’s motion for judgment on the pleadings and finding that 1-800 Contacts’ trademarks and the “Warby Parker” trademark were entirely dissimilar. 1-800 Contacts appealed.

1-800 Contacts argued that Warby Parker purchased search engine keyworks consisting of 1-800 Contacts’ trademarks to use them in connection with an adverting campaign designed to mislead consumers. 1-800 Contacts alleged that the purchase of these keywords resulted in consumer confusion because users searching for “1-800 contacts” would receive Warby Parker’s “ambiguous ads that generate source, sponsorship or initial interest confusion.” 1-800 Contacts further alleged that the webpage that was linked to Warby Parker’s advertisements “magnified this confusion” because it mimicked the look and feel of 1-800 Contacts’ website.

The Second Circuit noted that two types of consumer confusion were at issue in the case: sponsorship confusion, which occurs when consumers believe “the mark’s owner sponsored or otherwise approved the use of the trademark,” and initial-interest confusion. To sufficiently plead internet-related initial-interest confusion, “a showing of intentional deception [is necessary] . . . because consumers diverted on the Internet can more readily get back on track that those in actual space.”

The Second Circuit reviewed the eight-factor Polaroid test to assess whether 1-800 Contacts sufficiently pled a likelihood of confusion. The Court agreed with the district court that certain factors, including the strength of the mark, the competitive proximity of the products, the relative quality of the products, and good faith, favored 1-800 Contacts. However, other factors, including, most importantly, the similarity of the marks, favored Warby Parker: “Here, the pleadings failed to plausibly allege that Warby Parker used 1-800’s Marks anywhere during the search advertising process outside of its purchase at the initial, permissible keyword auction. . . . Thus, the [...]

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What a Croc! False Claim That Product Feature Is Patented Can Give Rise to Lanham Act Violation

by | Oct 17, 2024 |

The US Court of Appeals for the Federal Circuit reversed and remanded a grant of summary judgment on a false advertising claim, concluding that a cause of action under Section 43(a) of the Lanham Act can arise when a party falsely claims to hold a patent on a product feature and advertises that feature in a misleading way. Crocs, Inc. v. Effervescent, Inc., Case No. 2022-2160 (Fed. Cir. Oct. 3, 2024) (Reyna, Cunningham, JJ.; Albright, District J., sitting by designation).

Crocs, the well-known maker of molded foam footwear, sued several competitor shoe distributors for patent infringement in 2006. The case was stayed pending an action before the International Trade Commission but resumed in 2012 when Croc added competitor U.S.A. Dawgs as a defendant to the district court litigation. The case was stayed twice more, from 2012 to 2016 and 2018 to 2020. In between those stays, in May 2016, Dawgs filed a counterclaim against Crocs and 18 of its current and former officers and directors, alleging false advertising violations of Section 43(a) of the Lanham Act. 15 U.S.C. § 1125(a). The individual defendants were later dismissed from the action.

Dawgs claimed that Crocs deceived consumers and damaged its competitors by falsely describing its molded footwear material, which it calls “Croslite,” as “patented,” “proprietary,” and “exclusive.” Dawgs alleged that it was damaged by Crocs’ false advertisements and commercial misrepresentations because Crocs suggested that its competitors’ footwear material was inferior. Croslite is in fact not patented, as Crocs conceded.

Crocs argued in its motion for summary judgment that Dawgs failed as a matter of law to state a cause of action under Section 43(a) because the alleged advertising statements were directed to a false designation of authorship of the shoe products and not to their nature, characteristics, or qualities, as Section 43(a)(1)(B) requires. The district court agreed. Applying the Supreme Court’s 2003 decision in Dastar Corp. v. Twentieth Century Fox Film Corp. and the Federal Circuit’s 2009 decision in Baden Sports, Inc. v. Molten USA, Inc., the district court granted summary judgment to Crocs. It reasoned that falsely claiming to have “patented” something is similar to a false claim of authorship or inventorship, not to the types of false advertising prohibited by the Lanham Act. Dawgs appealed.

Dawgs argued that the district court’s application of Dastar and Baden to the circumstances of its case was inapposite, and the Federal Circuit agreed. In Dastar, the petitioner copied a television series in the public domain, made minor changes, and sold it as a video set, passing it off as its own. The Supreme Court held that a false claim of authorship does not give rise to a cause of action under the Lanham Act. Similarly, in Baden, the Federal Circuit found that a basketball manufacturer’s false suggestion that it was the author of the “innovative” “dual-cushion technology” in its basketballs did not give rise to a false advertising claim under the Lanham Act.

In this case, however, the Federal Circuit reasoned that Croc’s false [...]

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Don’t Tread on Illinois’ Absolute Litigation Privilege

by | Oct 17, 2024 |

Addressing when Illinois law’s “absolute litigation privilege” bars certain counterclaims, the US Court of Appeals for the Federal Circuit affirmed a district court’s summary judgment finding that the plaintiff lacked a valid trade dress and reversed the district court’s decision that declined to apply the absolute litigation privilege as a complete defense to all of the alleged infringer’s counterclaims. Toyo Tire Corp v. Atturo Tire Corp., Case No. 22-1817 (Fed. Cir. Oct. 4, 2024) (Moore, Clevenger, Chen, JJ.) (nonprecedential).

Toyo and Atturo are competitors in the tire design business. After perceiving widespread copying of its tire designs, Toyo filed a district court action asserting design patent infringement and trade dress infringement against Atturo. Atturo asserted counterclaims, including false designation of origin under the Lanham Act and several state law counterclaims. The district court eventually dismissed with prejudice Toyo’s design patent infringement claims and proceeded with just the trade dress infringement claim.

A primary issue in the case was the description of the asserted trade dress. In its complaint, Toyo identified its trade dress merely as “the overall appearance” of its line of tires. Over the course of discovery, disputes arose concerning Toyo’s failure to distinctly describe its asserted trade dress. Toyo answered an interrogatory that requested this information with a non-limiting definition. The district court compelled Toyo to provide a more specific answer, which Toyo did by providing highlighted images.

Toyo’s fact witness was subsequently deposed under Fed. R. Civ. P. 30(b)(6) and gave answers that were inconsistent with Toyo’s interrogatory response. This led the district court to compel more testimony on what exactly the asserted trade dress contained, and which tire features met the definition of the trade dress, and which did not. On the advice of counsel, the corporate witness declined to answer more than 100 different questions. Toyo’s inability to describe its trade dress continued into expert discovery. When it served its expert reports, Toyo introduced yet another aspect of its trade dress – that the trade dress only included two-dimensional aspects. Toyo introduced this new argument to support the requirement that to qualify as trade dress the designated feature must be nonfunctional.

Atturo moved for sanctions. In granting the sanctions, the district court barred Toyo from asserting only the two-dimensional aspects of the trade dress, precluding Toyo from continually shifting its position because doing so “would effectively lead to trial by ambush.” Having struck the only argument that could save the trade dress from invalidity, the district court granted summary judgment of invalidity on both functionality and lack of secondary meaning.

Trial then proceeded only on Atturo’s counterclaims. The jury returned a verdict in favor of Atturo on six of the counterclaims, awarding $10 million in compensatory damages and $100 million in punitive damages. The district court set aside the jury verdict as it related to counterclaims of defamation and liability under the Illinois Deceptive Trade Practices Act. Both parties appealed.

The Federal Circuit affirmed the district court’s issuance of discovery sanctions, and the grant of [...]

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Chickening Out: Reason for Trademark Abandonment Irrelevant Without Proof of Intent to Resume

by | Oct 3, 2024 |

The US Court of Appeals for the First Circuit affirmed a district court’s summary judgment decision finding that the prior owner of a trademark for fresh chicken had abandoned the mark by failing to use it for three years and failing to show an intent to resume use of the mark. To-Ricos, Ltd. v. Productos Avícolas Del Sur, Inc., Case No. 22-1853 (1st Cir. Sept. 19, 2024) (Montecalvo, Lipez, Thompson, JJ.)

PAS, a Puerto Rico corporation, sold Pollo Picú branded chicken from 2005 to 2011. The Picú trademark consists of a cartoon chicken with the phrase “Pollo Picú” underneath it:

While Pollo Picú was once a well-recognized brand in Puerto Rico, PAS encountered administrative and financial challenges. In 2006 and 2009, it failed to file declarations with the US Patent & Trademark Office (PTO) attesting to the use of the mark as required by Section 8 of the Lanham Act. The PTO therefore canceled the Picú trademark registration. PAS stopped selling chicken bearing the mark after its bank froze PAS’s financing in 2011. The bank filed suit in January 2012 under a preexisting loan agreement in which PAS had granted the bank a lien over PAS’s assets, including the Picú mark. PAS offered to sell the company to To-Ricos, PAS’s main competitor, but no sale occurred.

In October 2014, PAS and the bank signed a settlement agreement requiring PAS to pay a stipulated sum by December 2014 or the bank would foreclose on most of PAS’s assets, but not the Picú mark. The agreement provided that the bank would retain its lien over the mark until the foreclosure proceedings concluded. PAS failed to make the payment, but the bank did not exercise its foreclosure rights. In June 2017, PAS moved for the Commonwealth Court to order the bank to foreclose on PAS’s assets or declare PAS free of its obligations to the bank. The Commonwealth Court granted the motion in November 2019.

In April 2016, To-Ricos applied to register the Picú mark with the PTO. Three months later, PAS applied to re-register the same mark and filed an opposition to To-Ricos’s application. A year later, PAS licensed the right to use the Picú mark in the United States to IMEX. IMEX sold chicken under the mark for a few months but stopped after To-Ricos sent cease and desist letters.

In June 2019, To-Ricos began selling Picú branded chicken. It also filed a lawsuit against PAS, seeking a declaratory judgment establishing To-Ricos as the legal owner of the Picú mark. To-Ricos moved for summary judgment, arguing that PAS had abandoned its mark. PAS opposed. The district court agreed with To-Ricos, noting that PAS admitted to not having used the mark in commerce for at least three consecutive years prior to To-Ricos’s application, and that PAS had not demonstrated its intent to resume use of the mark within that period. PAS appealed.

PAS [...]

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Creative License: Fair Use Defense Paints Over Infringement Battle

by | Oct 3, 2024 | ,

Affirming the application of the fair use defense to copyright infringement, the US Court of Appeals for the Fifth Circuit determined that a district court’s sua sponte invocation of a fair use defense to parallel trademark claims was harmless error. The Court also affirmed that the district court did not abuse its discretion in awarding attorneys’ fees based on the prevailing party standard for copyright claims. Keck v. Mix Creative Learning Ctr., L.L.C., Case No. 23-20188 (5th Cir. Sept. 18, 2024) (Jones, Smith, Ho, JJ.)

Michel Keck, a multimedia artist, sued Mix Creative Learning Center, a Texas-based art studio, for copyright and trademark infringement after Mix Creative sold art kits featuring Keck’s dog-themed artwork and a brief biography, intended for at-home learning during the pandemic. Keck had registered her Dog Art series (in the form of decorative works) with the US Copyright Office and her name as a trademark with the US Patent & Trademark Office. Keck claimed that Mix Creative’s art kits violated her rights. After receiving notice of the lawsuit, Mix Creative promptly ceased selling its kits.

Following discovery, both parties filed cross-motions for summary judgment. The district court granted summary judgment in favor of Mix Creative on Keck’s copyright claim, finding fair use, and also granted summary judgment on the trademark claim sua sponte, as both parties had agreed that the fair use defense applied to both claims. The district court further awarded Mix Creative more than $100,000 in attorneys’ fees and costs, although it declined to hold Keck’s attorneys jointly and severally liable.

Keck appealed, challenging the copyright fair use finding and the district court’s sua sponte application of the fair use defense to the trademark claim. Mix Creative challenged the district court’s refusal to hold Keck’s attorneys jointly and severally liable for fees.

The Fifth Circuit affirmed the district court’s application of the fair use defense to Keck’s copyright claims. The Court focused on the first and fourth factors of the fair use defense (respectively, the purpose and character of the use and the effect of the use on the potential market for or value of the original work), noting that the courts typically give these two factors special attention.

On the first factor, the Fifth Circuit found Mix Creative’s use to be transformative. Although Mix Creative is a commercial enterprise, the art kits served an educational purpose, distinct from the decorative purpose of Keck’s original works. As a result, the likelihood of Mix Creative’s kits serving as a substitute for Keck’s original works in the market was low.

The fourth factor also favored Mix Creative, as the Fifth Circuit found no evidence that Mix Creative’s kits would harm the market value of Keck’s original decorative works. In fact, the Court suggested that the kits might enhance Keck’s reputation and sales by providing her with free advertising. Furthermore, Mix Creative operated in a different market (educational rather than decorative), and Keck had not demonstrated any history of selling derivative works for children’s art lessons. The [...]

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