​It is a basic tenet of U.S. trademark law that rights in a trademark are gained through use of the mark in the United States.  Priority in trademark rights, and the ability to stop others from using the same mark, is based on actual use in the marketplace.  But a recent Trademark Trial and Appeal Board decision,  Empresa Cubana Del Tabaco D.B.A. Cubatabaco v. General Cigar Co., Inc. (TTAB 2022),  recognized an exception to this rule, based on a 1929 treaty, the Inter-American Convention for Trade Mark and Commercial Protection, commonly referred to as “the Pan American Convention.”

The proceeding was the latest installment in a 25-year legal battle between Empressa Cubana, a Cuban company, and General Cigar, a U.S. company based in Virginia, over the trademark COHIBA for cigars.  Empressa Cubana has been barred for 60 years by the Cuban embargo from selling its cigars in the United States.  The dispute has lead to several court opinions, including from the Second and Federal Circuits.

In the latest dispute, Empressa Cubana brought a proceeding to cancel two registrations by General Cigar, based largely on the Pan American Convention.  The United States joined that treaty in 1929, and most countries in Latin America, including Cuba, are signatories.  The treaty protects (1) nationals of contracting states, and (2) domiciled foreigners who own a manufacturing or commercial establishment or an agricultural development in any of the contracting states.

The treaty provides that where a protected party seeks to register its mark in another member country and is refused registration because of another “interfering” registration, the latter can be cancelled if (a) the petitioner had legal rights in another member state prior to the registration and (b) the owner of the interfering registration had knowledge of the prior mark in another member state.

​Empressa Cubana showed that it had trademark rights in Cuba since the 1960s, and that General Cigar, who had applied for its registration in 1992, had knowledge of this.  On that basis, the Board cancelled General Cigar’s two registrations.
The implication is that any trademark rights in any country that is a member of the Pan American Convention may be given priority over local users in other member states.  U.S. trademark owners, particularly those with products or marks that are used in Latin America, now need to pay attention to rights that other companies may have in these countries, and their impact on U.S. rights. 

The Federal Arbitration Act makes contractual agreements to arbitrate disputes enforceable.  But these rights, like any contractual rights, can be waived.  It often happens that a party to such a contract will spend months or years litigating before invoking an arbitration provision.  A court may conclude that the party has waived its right to arbitrate.

A recent Supreme Court decision, Morgan v. Sundance, Inc. (2022) has made it easier to find a waiver in this situation.  Many Courts of Appeal applied a specific test for arbitration clauses, requiring a showing that another party has been harmed or prejudiced before a waiver will be found.  In the Morgan case, that lead the Eighth Circuit to find no waiver.
The Supreme Court in Morgan rejected that law, holding that waiver is not determined by arbitration-specific rules, but by the general law of waiver, which does not require a showing of prejudice. It noted that while the FAA does embody a strong federal policy to enforce arbitration agreements, that policy “is to make “arbitration agreements as enforceable as other contracts, but not more so . . . The federal policy is about treating arbitration contracts like all others, not about fostering arbitration.”  There is thus no requirement to show prejudice.

The Morgan decision did not specify what standard to apply to determine waiver, and lower courts have been divided as to what standard now applies.  In 2010, the Second Circuit adopted a three-prong standard to determine waiver, with courts considering:  “(1) the time elapsed from when litigation was commenced until the request for arbitration; (2) the amount of litigation to date, including motion practice and discovery; and (3) proof of prejudice.”  La. Stadium & Exposition Dist. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 626 F.3d 156, 159 (2d Cir. 2010).  After Morgan, should courts apply that standard, only omitting the third prejudice prong? Or, should they completely discard it in favor of a more general standard for waiver of rights under a contract, i.e., whether the contractual right was “knowingly, voluntarily and intentionally abandoned?”     

In Herrera v. Manna 2nd Avenue LLC (S.D.N.Y. 2022), the court was unsure about this question,  but avoided it by holding that under either standard, there was no waiver.   One New York court concluded that under Morgan’s reasoning, the general waiver standard applies.  Deng v. Frequency Elecs., Inc. (E.D.N.Y. 2022)  Another held that the Second Circuit standard, minus the prejudice requirement, should still apply.   Carollo v. United Cap. Corp. (N.D.N.Y. 2022).  So the precise standard to apply for waiver remains unclear.

What is clear, however, is that now a party that fails to assert a right to arbitrate as early as possible may lose it.  As one court observed:  “The judicial system was not designed to accommodate a defendant who elects to forego arbitration when it believes that the outcome in litigation will be favorable and then suddenly change course and pursue arbitration. The waiver doctrine exists to prevent parties from invoking the judicial process and thereby defeating the key purpose of arbitration: saving the parties’ time and money.” 

We previously wrote about the landmark Court of Appeals decision in Freedom Mortgage Corp. v. Engel (2021), which dealt with application of the statute of limitations in mortgage foreclosure decisions.  Since Engel, courts have grappled with its application in various circumstance.  See our prior article here.  A recent Court of Appeals decision, Everhome Mortgage Co. v. Aber (2022) resolved one such issue.

The Engel court held (1) the filing of a foreclosure action accelerates all payments on a mortgage and starts the six-year clock for all payments and (2) the voluntary dismissal of the foreclosure action de-accelerates the mortgage, and stops the clock on future payments. However, courts were split as to whether an involuntary dismissal also deaccelerates the mortgage and stops the clock running on the statute of limitations.  The Second Department held that the second part of Engel does not apply to involuntary dismissals, while the Second Circuit has held it does. 

In Everhome Mortgage, the Court of Appeals sided with the Second Department.  That case involved a second foreclosure action that was held time-barred.  The lender had filed a prior action (which accelerated the debt under Engel), but that first action was dismissed without prejudice, based on the lender’s failure to appear for a court conference.  The lender waited over six years from the filing of the first action to file a second.  Agreeing with the Appellate Division, the Court of Appeals held that the action was time-barred, as the involuntary dismissal did not de-accelerate the loan. 

Many businesses compile databases of information about their customers or website users, and these can be very valuable to other businesses seeking to market to the same consumer base.  But does sale of such information violate the right of publicity of the persons listed? A recent decision, Huston v. Hearst Communications, Inc., (7th Cir. 2022), addressed this issue.

Elizabeth Huston is a subscriber to Good Housekeeping, published by Hearst, and alleged that Hearst violated here right of publicity under Illinois law by offering for sale and selling mailing lists that identified its magazine subscribers, by name, address, “gender, age, ethnicity, income, political party, religion, and charitable donation history,” among other personal attributes.ouHouse
 
The Seventh Circuit rejected her claim because under Illinois law, to sustain such a claim, the person’s identity has to be used “for commercial purposes.”  In that case, her identity and other information were not used to promote a product (the mailing list), but consisted of the product itself.   It distinguished prior decisions where a sampling of the personal information was used to promote access to a larger database, and the right of publicity might well be infringed. “It is not enough for Huston’s name and other information to appear on or within a product. Her identity must help sell something—whether it is that product or a separate product or service.”

In a later decision, Hoffower v. Seamless Contacts, Inc. (N.D.Ill. 2022), a website came out on the wrong side of this distinction.  The plaintiff alleged that the defendant operates a websites that advertises that in return for a paid subscription, a subscriber will receive access to profiles of individuals with personal information.  The website offers potential subscribers a free trial that allows them to search for, view, and download a limited number of profiles, until they have expended all their “credits.” She further alleged that in response to a search for her name, Seamless displayed search results showing her personal information, a counter showing how many credits remained in the free trial, and an “upgrade” button that promoted the trial user to purchase a subscription to obtain more credits.

​The district court held that this was sufficient to state a claim for violation of her right of publicity, because access to her profile as a free was used as a promotion to encourage potential customers to purchase a subscription to the entire database.  Her profile was thus being used separately from the “product,” the entire database.
Thus while mere sale of a database that includes personal information will likely not violate a right of publicity, the use of portions or samples of a database to promote sales and subscriptions to the whole will do so.