Pursuant to the “license barrier” rule in Sec. 4j German Income Tax Act, newly introduced as of 1 January 2018, arm’s length business expenses of a company incurred for the right to use intellectual property (“IP”) and certain other rights are not fully deductible from the income tax base, if (i) the corresponding licensing income of the licensor is taxed at a rate lower than 25% (“Preferential Taxation”), (ii) this low tax rate is not the standard tax rate applicable in the respective jurisdiction Continue Reading Limited German Tax Deductibility of Low-Taxed License Payments Made to Related US Entities

On 22 March 22 2017, in the case of Star Athletica LLC v. Varsity Brands, Inc., et al, No. 15-866, the Supreme Court of the United States ruled, in a 6-2 decision, that design elements of a cheerleading uniform may be protected under copyright law, even though the uniform has a utilitarian function.

It is a well-known tenet under United States copyright law that apparel is outside the scope of the Copyright Act of 1976, which bars protection for works of authorship that possess utilitarian functions.  However, §101 of the Copyright Act carves out a limited exception, namely that “pictorial, graphic or sculptural features” of the design of a useful article are entitled to copyright protection if they “can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.”

Star Athletica v. Varsity Brands involves copyright infringement of cheerleading uniforms designed by Varsity Brands, considered to be the leader in the market, copied by its rival, Star Athletica.  The majority opinion, written by Justice Thomas, sided with Varsity Brands, and ruled that the two-dimensional pictorial design, consisting of chevron, zigzags, stripes and colorful shapes, applied to Varsity Brands’ uniforms was deserving of copyright protection under §101 of the Copyright Act.

This case has elicited microscopic scrutiny by the fashion industry. Continue Reading Supreme Court of the United States: Cheerleading Uniforms Can be Copyrightable: Star Athletic LLC v. Varsity Brands, Inc.

The question of whether a sequence of exercises, such as yoga poses or dance moves, can be copyrighted has occupied the attention of international courts, scholars and copyright offices for some time. In late 2015, the issue received some media attention when yoga guru Bikram Choudhur tried to gain a US copyright in a signature sequence of yoga poses but failed before the Court of Appeals for the Ninth Curcuit. Despite the effort of international copyright conventions, the question of copyrightability essentially remains a matter of national law. Continue Reading The Copyrightability of Yoga Poses, Dance Moves and Exercise Routines

According to the code of ethics of the International Association of Culinary Professionals, a culinary professional must not knowingly “appropriate […] any recipe or other intellectual property belonging to another without the proper recognition.” And, in addition to the ethical, there are legal issues. While copying culinary creations might not sound like a big deal to millennial food bloggers and vloggers, lawsuits—sometimes with high stakes—have been filed over (mis)appropriated recipes. But whether claims to a signature dish will hold up in court is a different question and will likely depend on the scope of protection of the applicable copyright law(s). Continue Reading Your IP Valentine: Can Recipes Be Protected by Copyright?

On 2 December 2016, President Obama issued an administrative order to prohibit the proposed acquisition of a controlling interest in Aixtron SE (Aixtron) by Grand Chip Investment GmbH (GCI), a German company partially owned by Fuijan Grand Chip Investment Fund LP, a Chinese partnership with some Chinese government ownership. It was only the third time in history that a US president has formally blocked a proposed foreign acquisition of a US business due to national security concerns identified during the review process by the Committee on Foreign Investment in the United States (CFIUS). Continue Reading US President Blocks Proposed Chinese Acquisition of German Semiconductor Company on National Security Grounds

On 15 November 2016, the US Federal Trade Commission (“FTC” or the “Commission”) issued an “Enforcement Policy Statement” (“Policy Statement”) to provide guidance about its enforcement policy on marketing claims for over-the-counter (“OTC”) homeopathic remedies. The FTC concluded that marketing claims that OTC homeopathic products have a therapeutic effect (beyond placebo) lack a scientific basis. Consumers were therefore likely to be deceived by labels that do not disclose the lack of “adequately substantiated evidence” that ‎those products have the claimed treatment effects. Continue Reading US Federal Trade Commission Wants Marketers of Homeopathic Remedies to Disclose Lack of Scientific Evidence

When cobwebs and tombstones start to show up in your neighborhood, probably something wicked is coming your way—except that one night of the year, on Halloween. Even though Halloween involves frightening things—haunted houses, the undead, tricks in response to no treats—it is ultimately about carefree fun. And there’s candy! But if you are in a Halloween-related business, there is a genuinely scary side to the holiday—IP issues that, if ignored, could lead to a wicked lawsuit. Continue Reading Avoid the Halloween “Trick” of an Intellectual Property Lawsuit

On 11 July 2016, the US Court of Appeals for the Federal Circuit issued a unanimous en banc ruling in The Medicines Company v. Hospira Inc. that a sale of manufacturing services by a contract manufacturer to an inventor to create embodiments of a patented product for the inventor does not trigger the on-sale bar of 35 U.S.C. § 102. Continue Reading US Federal Circuit: Outsourced Manufacturing Is No Ground for Invalidity Under the On-Sale Bar

On 23 June 2016, a US federal jury concluded that Led Zeppelin’s Jimmy Page and Robert Plant did not copy the opening guitar riff in “Stairway to Heaven” from the song “Taurus,” an earlier tune by US rock band Spirit. The latter song, a 2-minute 27-second instrumental, was recorded nearly four years before “Stairway,” and was released on Spirit’s self-titled debut album in 1968.

The conclusion of the “Stairway” case comes a little more than a year after a federal jury in Los Angeles, California, awarded millions to R&B-soul singer Marvin Gaye’s family. The jury decided that recording stars Robin Thicke and Pharrell Williams had plagiarized Gaye’s “Got to Give It Up” in creating their hit single “Blurred Lines.” Continue Reading Led Zeppelin Prevails in US Copyright Case Over Their Iconic Ballad “Stairway to Heaven”

On May 11, 2016, President Barack Obama signed the Defend Trade Secrets Act of 2016 (“DTSA”), which creates a new federal private cause of action for trade secret misappropriation. The DTSA amends Chapter 90 of Title 18 of the US Code regarding the protection of trade secrets, which had previously only provided for criminal penalties.

Under the DTSA, the owner of a trade secret may bring a civil action for acts of misappropriation occurring on or after the date of enactment of the DTSA if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce. The remedies available include damages and injunctive relief, as well as seizure of “property necessary to prevent the propagation or dissemination of the trade secret” based on an ex parte application by the trade secret owner to a court. The DTSA also provides for security and protection of the subject trade secrets while in the custody of the court. Continue Reading New US Law Provides for Federal Private Cause of Action for Trade Secret Misappropriation