I was flattered to be asked to appear on the “Deadman’s Tome” podcast recently. While the podcast is primarily oriented toward horror fans, the host, “Mr. Deadman,” ran across the #CockyGate saga on Twitter and wanted to discuss the general issue of registering simple words as trademarks for book series. We talked about what trademarks are, how they work. and what’s going on with the #CockyGate lawsuit and PTO process. We also talked about lootboxes and I displayed my utter inability to commit to a favorite horror movie. Check it out!
As always, thanks for reading!
As usual: I am an attorney, but nothing herein should be viewed as legal advice. I am writing on the basis of both known facts and allegations, and if those allegations are changed or proven incorrect my analysis would likely change as well. You should consult an attorney licensed in your jurisdiction and familiar with the relevant law before making legal decisions.
Faleena Hopkins, the protagonist (or antagonist, depending on your POV) of the “Cockygate” saga, which I addressed in this post, has taken her grievances to the Federal District Court for the Southern District of New York. (That’s the Federal District Court that covers New York City and its environs.) She has sued:
- Kevin Kneupper, the attorney who filed a Petition to Cancel her trademark registration for “COCKY”.
- Tara Crescent, an author who has published romance novels incorporating the word “Cocky” in their titles.
- Jennifer Watson, a publicist participating in the promotion of an anthology called “Cocktales” specifically set up to raise funds to help people who have incurred legal expenses related to the “COCKY” mark and similar sorts of marks. NOTE: Multiple persons have alleged that Ms. Watson was not involved in the creation and publication of the anthology, as I originally stated. Assuming they are correct, I regret the error.
The plaintiff has asked for a lot of things in her complaint. She wants the court to declare that her mark is valid. She wants a declaratory judgment that her mark isn’t infringing any mark of the defendants, or any other right of theirs, and an injunction to stop all the defendants from, essentially, harassing her about her mark and her use of it. She wants the people who are selling allegedly infringing books to stop it and to pay damages to her for doing it. As far as Kneupper, who hasn’t published any allegedly infringing books, she wants the court to order the USPTO to dismiss his Petition to Cancel her registration, with prejudice. (That means he can’t re-file it later, as opposed to a dismissal without prejudice, which means he could correct it and try again.) And, finally, she wants attorney’s fees from everybody.
I moderated my first Anime Central panel yesterday. It was a variant on a panel I’ve done before, which I call “GeekLaw: Law, Pop Culture and Creativity.” I managed to spend most of the day at the con, so I thought a little recap might be fun. Please note that if you were at the panel and you’re looking for the presentation materials, here they are:
I arrived about 11AM and it was touch and go whether I’d even get a parking space. The convention center’s lot was so full it was blocked off already. Fortunately the Hyatt still had a few spaces (the convention is held at the Rosemont Convention Center, which is physically attached to the Hyatt hotel.) Unfortunately, that lot costs a lot more, but you gotta do what you gotta do.
But at least I found a space and was able to make the first panel that had caught my eye, “Scum & Villainy: Why It’s Good to be Bad.” I was under the impression this would be a how-to panel, but it turned out to be how to write about villains. Which was obviously disappointing but it was still a fun panel.
After that I went through Artist’s Alley, which was much better laid out this year than last year – one aisle was still a little tight, but you could get by. I picked up a cute little sketch zine from Lisa Imas (http://hashtag-art.tumblr.com/) called “things i drew when i should have been paying attention, or how i almost failed all my classes.) I got this because it reminded me of the time I almost got thrown out of a class in law school for laughing at the book I was reading when I was supposed to be paying attention. 🙂 I also encountered this retro cosplay:
The next panel I went to was a fan fiction panel. As I sometimes do when fan fiction is discussed, I went to the moderator before the panel and mentioned that I was an intellectual property attorney and that if any questions about legal issues came up, they were welcome to call on me if they didn’t have their own legal expertise.
I’m sure you can tell what happened next.
The question did come up, and the moderator very graciously invited me to stand up and borrow a microphone and talk for a few minutes about the legal issues related to fan fiction. It seemed to be very well received and people commented that it was helpful. I also plugged my own panel, which wasn’t for hours yet but it seemed only fair. So thank you to moderator Pearson Mui (http://www.jurai.net/~pmui/adintro.html) for asking me to speak.
With some time to kill, I headed back to the show floor and scoped out some cheap manga books, as well as running into these two:
In one of the cleverest (and most adorable) mashup cosplays I have seen in a long time, that’s Sailor Ladybug and Tuxedo Noir. (That’s what I call them, anyway.) I had to leave before seeing quite all of the floor because I wanted to attend a panel called “Copyright 101,” put on by Kumate Works. I admit that I went to this to see if the information being presented was reasonable, because while I try not to be obnoxious about it, if I see a presenter giving information that will get somebody sued, I will say something. However, my concerns were completely unnecessary. The presenter knew her stuff and had consulted with an intellectual property attorney to develop her presentation. It was excellent. Once again, I got outed, but once she knew I was an IP attorney I kept my yap shut unless she asked me for confirmation of something. I was very impressed.
Then I had to bolt around the panel room area to get to a paneled identified as “Game Development – The Crash Course.” It was put on by Mark Kakareka of Guilty10Games. Promising to be a “crash course” in the basics of game development, the panel delivered quite well in my opinion. Acknowledging that he couldn’t teach anything of practical substance in 45 minutes, the presenter instead hit the big picture elements – have a plan, write it down, do a design doc, use tools appropriate to your technical skill level – and provided some examples of each. I thought it was about as much as you could ask from a one-hour panel on a topic that you can literally get college degrees in. I got made again when somebody asked a legal question and I volunteered to answer it, but once more I apparently wasn’t too obnoxious and nobody seemed to mind my assistance.
I thought about going to another panel but the show floor had just closed and there were huge lines to pretty much everything, so I took a little break. When it got close to time, I went to the panel room I was in only to find that the panel going on in it was being run by a person I follow on Twitter, @Homura_Bakura. Her enthusiasm and happiness to be talking about something very dear to her was really amazing and while I did come in toward the end, everybody was obviously super happy to be there, so well done. After saying hi while she was on the way out I got set up for the panel.
I was stunned to see that even though we were doing a law education panel at 10:30 on a Saturday night, there were about thirty people waiting to come in. Thank you so much to everyone who chose to use part of their Con Saturday night to be with us! Thanks also to my fantastic co-panelists Sam Castree (http://www.twitter.com/indiegamelawyer) and Diana Qiao (http://www.twitter.com/dianaqiao.) The panel went great, we had wonderful questions, and everybody put up with my rambling far better than I could have expected. (It was a long day.)
Then I went home and passed out.
So thank you again, everybody, and hopefully I’ll see you again soon!
UPDATE 05/07/18: Reports that Amazon is advising publishers of takedown notices are circulating online. Please note that there are TWO KINDS of takedown notice Amazon can get, and then advise sellers of. The first is a copyright takedown, often referred to as a DMCA Notice (though there are other kinds.) The second is a trademark takedown, often referred to as a Brand Registry takedown (though there are other kinds.) THEY ARE NOT THE SAME. Sending a DMCA counter-notice in response to a trademark takedown will be ineffective. Brand Registry notices can be very difficult to deal with. I recommend anyone who wants to fight one retain an experienced trademark attorney.
FLASH UPDATE: Retired IP litigator and author Kevin Kneupper has filed a Petition for Cancellation of the “COCKY” standard character mark. Link to his filing here: https://twitter.com/kneupperwriter/status/993359859071381505. The petition will now be considered in due course by the Trademark Office. We should not expect to hear anything for a few weeks, and the matter could take months to resolve. But in the meantime the registration stands and the risks remain.
Please Note: As I type, this appears to be a developing situation. The trademark in question was registered literally only three days ago. I have not seen any of the C&D letters people are alleging are going out. Nothing in this post should be taken as legal advice or even as verified fact. This is for general education only.
Also please note that the Romance Writers of America, an industry group, is allegedly also looking into this matter. They will probably provide a centralized response. Author Liliana Hart reports that the RWA requests that people who are contacted by Ms. Hopkins or her attorneys contact Carol Ritter of the RWA at this email: firstname.lastname@example.org
If you get a cease and desist letter or any other form of legal communication, you may find my “HELP, I JUST GOT A LEGAL THING!” post useful. Click here to read it.
UPDATE: I did not see that the publisher had two trademark registrations, one for the standard character mark, and one for the stylized mark. Post edited accordingly.
Now on with the post.
This evening I started seeing tweets like this one:
There's a romance author, Faleena Hopkins, who is sending takedown notices to other romance authors because she thinks she has a trademark on the word "Cocky." Which she doesn't have, but is hoping her threats make people change their titles.
— Christopher Sebela (@xtop) May 5, 2018
So on March 28, 2018, the Ninth Circuit Court of Appeals issued this opinion:
It has been all over the Interwebs, but there’s a lot of misunderstanding going on. I happen to have not only some experience in gaming law, but experience in dealing with the particular statute in question, Wash. Rev. Code § 9.46.0237, the “unlawful gambling” law in the state of Washington. From experience, I can tell you that it is one of the broadest gambling laws in the country. The Ninth Circuit takes special note of this, especially when it finds citations to decisions on the law of other states unpersuasive.
So, in no particular order, some observations and clarifications:
- This case was originally brought in a Federal District Court. While there are Federal gambling laws, most cases of actual interpersonal acts that might be gambling are subject to state laws. There’s not really a Federal law that governs acts of gambling in a general manner. The case was brought in Federal court because it is a class action against Churchill Downs, which is a corporation resident in Kentucky, and the class, with the representative plaintiff being Ms. Cheryl Kater, a resident of Washington. This is allowed because of what is called “diversity” jurisdiction: people who live in different states can bring suit in Federal courts because it’s viewed as fairer for both parties to have diverse lawsuits brought in a Federal court under a single Federal civil procedure and with a hopefully less biased court.
- But, as I said, there are no Federal gambling laws that apply: the plaintiff is suing under a state gambling law. Federal courts hear cases under state law all the time. The reason Washington’s law applies is that the alleged gambling took place, at least in part, in Washington (where Ms. Kater’s device was) and by offering the service to her in that state, Churchill Downs may have made itself subject to the laws of her state. (That’s a whole separate discussion which I will not get into.)
- Now that we know how she got there, here’s what Ms. Kater is claiming:a) Washington’s state gambling law says that people who take money to provide illegal gambling services aren’t allowed to keep it: the person who gave it to them can sue in civil court to get it back.
b) Under Washington law, the game Churchill Downs, under the name of software publisher Big Fish Casino, was illegal gambling.
c) Ms. Kater gave Big Fish Casino a lot of money (at least a thousand dollars) to play in Big Fish Casino. Other people in the class likewise paid money to play at the casino and it was gambling too.
d) Therefore, she and all other similarly situated members of the class (people in Washington who played in the casino and paid money to do so) should get their money back.
Whew! Let’s unpack that a little bit.
As far as “people can get their money back if they lost it gambling illegally,” that is actually a pretty common rule. You may like it, you may not think it makes any sense. But it is what it is and I’m not going to discuss that other than to say that that’s the rule here and in many other places.
As far as “she gave them a lot of money to play,” you can have whatever opinion you want as to what that says about her intelligence, impulse control, etc. I will say that these games are designed by psychologists to be pure dopamine generators. I doubt many people reading this aren’t familiar with being sucked into a game: imagine that feeling, only with actual SCIENCE! applied to trying to generate it. I think regulated gaming should be legal for informed adults, but I am not blind to this kind of thing.
But now we get to the heart of the matter: was this game unlawful gambling? You may know, especially if you read my blog, that the crime of gambling usually consists of three elements: consideration (which is your stake, your wager, the thing you put at risk to play,) chance (the outcome of the play has to be outside your control in some way, usually by way of a random event,) and prize (you have to be able to win something of value.) We definitely have consideration: while you can initially get play points by various unpaid means, you eventually have to buy them, and you can’t play if you don’t have play points. We likewise have chance: the games she played are literally video slot games which use a random number generator to determine whether the player wins any particular game played.
But do we have a prize? Is there a thing of value?
NOW PAY ATTENTION BECAUSE I’VE BEEN TRYING TO WARN YOU PEOPLE AND NOBODY WANTS TO LISTEN.
Here is the definition of “thing of value” under Washington law:
[A]ny money or property, any token, object or article exchangeable for money or property, or any form of credit or promise, directly or indirectly, contemplating transfer of money or property or of any interest therein, or involving extension of a service, entertainment or a privilege of playing at a game or scheme without charge. Wash. Rev. Code § 9.46.0285
It doesn’t limit “things of value” to money or things that can be exchanged for money. While allegedly there was a black market for play points that involved using external payments for play points to then be exchanged in-game (with a cut for Big Fish, which does NOT look good) the lower court specifically said that that was a violation of the TOS and it wasn’t relevant anyway. Because play points are the embodiment of a privilege of playing at a game or scheme without charge.
This, by the way, is a historical artifact related to pinball machines and “clear” or “reset” switches. Back in the olden days, if you won free credits on a pinball machine, the bartender could hit the reset switch and clear the credits, and pay you what they were worth. This was considered gambling under the anti-pinball moral panic of the day, so it was made illegal in many jurisdictions. Whether or not a game has a reset switch is often crucial to determining whether it is an unlawful gambling device or a lawful entertainment device.
But I digress.
The point is, prizes, or things of value, are what the law says they are, not what you think they are. This varies by jurisdiction and it is incredibly complicated. If you want to make a game that arguably has the three elements of gambling *cough*lootboxes*cough* but defend yourself from possible charges of gambling by claiming your “prizes” are not “things of value,” you are walking on very thin ice. When I was advising an international gaming company, I had a binder several inches thick that contained gambling statutes and expert legal analysis of what those statutes meant. It had to be updated constantly. And there were some jurisdictions where certain features were available and other jurisdictions where they were not. Keeping track of that is part of the process, and cost, of doing business for an international gaming company.
If you are not willing and/or able to adopt that process, or assume that cost, you have no business operating in this field. Especially since the more casual/entertainment gaming sphere’s use of some of these principles *cough*lootboxes*cough* is starting to show up on the radar of legislators and gaming commissions. I expect significant change in the regulatory environment in the near to medium term: the only way you, as a developer, have any chance of staying out of trouble is to get good legal counsel. Or, alternatively, don’t offer products that include these kind of features.
As always, questions are welcome in the comments or on my Twitter @legalinspire. Thanks for reading!