Hunton Retail Law Resource

Branded keyword advertising (“BKA”)—bidding for your company’s website to feature prominently near a search engine’s results for branded or trademarked terms—has been around for over a decade. Under this practice, search engines auction off keywords, and the highest bidders receive advertising space adjacent to search results for those terms. Brand owners commonly bid on their own keywords and those of their competitors and related third parties.

Concerns that BKA runs afoul of trademark, false advertising, and unfair and deceptive trade practices laws were largely put to rest in 2013 and 2014, when a wave of court decisions held that, on its face, the practice does not constitute trademark infringement or cause customer confusion. However, a new challenge to BKA emerged earlier this year with the filing of Tichy v. Hyatt Hotels Corp., No. 1:18-cv-01959 (N.D. Ill.). In Tichy, a putative class of online consumers alleges that six major hotel chains violated antitrust laws by conspiring with each other and with third-party online travel agencies like Expedia and Priceline to refrain from bidding on each other’s branded keywords.

The Ninth Circuit will decide whether Great Lakes Reinsurance must defend clothing company, In and Out, against a trademark infringement suit by Forever 21. The dispute focuses on exclusionary language in the general liability policy issued by Great Lakes to In and Out, which broadly bars coverage for claims stemming from violations of intellectual property rights, but which also excepts from the exclusion claims for copyright, trade dress and slogan infringement occurring in the company's advertisements. The appeal concerns last year’s ruling by a California federal judge that Great Lakes owed a defense because the underlying complaint raised a potential that In and Out’s advertising infringed Forever 21’s trade dress.

As the retail industry continues to invest in and leverage new automation technologies to meet organizational efficiency and cost reduction goals, a growing number of retailers are looking to robots, or more specifically, service delivery automation or robotic process automation (“RPA”), as a solution. What is RPA? In the abstract, RPA is the substitution of human workers with automation. In the real world, according to the Institute for Robotic Process Automation, that translates to software robots that capture and interpret data from existing applications to process transactions, manipulate data, trigger responses and communicate with other digital systems. RPA doesn’t mean that robots will soon be sitting in a cubicle in accounting...at least not yet.

On August 8, 2016, the Federal Trade Commission sued 1-800 Contacts, alleging that it entered into anticompetitive bidding agreements with 14 of its rivals. According to the administrative complaint, these bidding agreements are an unfair method of competition because they unreasonably restrain competition for bidding on online search advertising auctions and restrict truthful, non-misleading ads. Previously, 1-800 Contacts alleged that its rivals had engaged in trademark infringement by purchasing advertising space from online search engines when consumers searched for “1-800 Contacts.” Most of 1-800 Contacts’ rivals agreed to settle or avoid lawsuits by entering into the allegedly anticompetitive bidding agreements, which prohibit parties from bidding on their rivals’ trademarked terms. Additionally, all but one of the contracts also require the use of “negative keywords,” which will prevent an advertiser’s name from appearing if a rival’s name is used as a search term.

On June 14, 2016, two lawyers in Hunton’s Insurance Coverage Counseling and Litigation practice, Syed Ahmad and Jennifer White, published an article in Risk Management Magazine about how commercial general liability (“CGL”) policies may help policyholders looking to recover attorney’s fees or fund settlements in trademark infringement litigation. Historically, CGL policies were the wrong place to look for coverage, and insurers raised often successful defenses to covering such trademark infringement cases under CGL policies. Or, policyholders would avoid CGL ...

Companies across all industries, including retail, are seeing a significant uptick in software audits and similar software license compliance reviews. These audits can disrupt the day-to-day operations of even the most efficient IT departments and result in additional license fees, back-maintenance payments, penalties for noncompliance and external legal fees. The more aggressive software licensors may also threaten breach of contract claims, infringement claims, remote disabling of software, suspension of maintenance and other more disruptive practical measures. However, there are ways to limit exposure to such costly software audits and the associated risks, and to even prevent them from occurring in the first place.

As reported in the Hunton Employment & Labor Perspectives blog, the National Labor Relations Board (“NLRB”) held that rules in Whole Foods’ General Information Guide prohibiting unapproved tape and video recording in the workplace violate Section 8(a)(1) of the National Labor Relations Act (“NLRA”).

The en banc US Court of Appeals for the Federal Circuit issued its opinion today in SCA Hygiene Products Aktiebolag, et al. v. First Quality Baby Products, LLC, et al., Case No. 2013-1564. In a 6-5 decision, the court reaffirmed that laches is a defense to a suit for damages for patent infringement. In reaching this decision, the Federal Circuit distinguished Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014), in which the US Supreme Court held that laches is not a defense to a suit for damages under the Copyright Act.

This week, the US Court of Appeals for the Federal Circuit issued a precedential decision addressing two important patent damages issues: the entire market value rule and the proper application of the Nash Bargaining Solution in VirnetX, Inc. v. Cisco Systems, Inc., No. 13-1489 (Fed. Cir. Sept. 16, 2014). In vacating a $386 million damages award against defendant Apple Inc., the Federal Circuit first resolved conflicting treatment of the application of the entire market value rule (EMV) by the district courts in cases where the smallest saleable unit is the entire accused device ...

The Eighth Circuit recently issued an opinion in the Interstate Bakeries Corporation bankruptcy case reversing its previous holding that a perpetual royalty-free trademark license constituted an executory contract that could be assumed or rejected in bankruptcy.  The Eighth Circuit, in a rehearing en banc on its earlier decision in Interstate III2, determined that the contract at issue should be considered part of an integrated agreement with another contemporaneously executed deal. When the Eighth Circuit expanded the parameters of the contract being considered, it ...

The Supreme Court during its 2013–14 term decided on six patent cases, the last on June 19, 2014. These cases will have significant consequences for companies as they work to advance their strategy for protecting their intellectual property. The attached client alert provides highlights of each case.

Read the full client alert.