WEBVTT - First Trademark Trial Over NFTs 0:00:03.160 --> 0:00:07.960 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:10.200 --> 0:00:13.600 It's four thousand, I know, and there's a waiting list. 0:00:13.800 --> 0:00:19.240 I assumed five years for a bag. It's not a bag, 0:00:20.079 --> 0:00:25.680 it's a Birken The Hermes broken bag the ultimate status symbol, 0:00:26.000 --> 0:00:31.440 instantly recognizable, hard to get with stunning prices ranging from 0:00:31.440 --> 0:00:35.600 ten thousand to more than three hundred thousand dollars, and 0:00:35.800 --> 0:00:38.279 of course it's been the subject of more than one 0:00:38.440 --> 0:00:44.240 storyline on Sex in the City, Broke my Broken Sort. 0:00:45.880 --> 0:00:49.200 So it's no surprise that French luxury brand air Mez 0:00:49.560 --> 0:00:53.760 sued for trademark infringement when a digital artist started creating 0:00:53.800 --> 0:00:57.480 and selling meta broken and f T s. They depict 0:00:57.560 --> 0:01:01.480 digital images of the broken bag covered a cartoonish colorful 0:01:01.560 --> 0:01:05.600 fur instead of leather. Is it art or a digital knockoff? 0:01:05.880 --> 0:01:08.679 The trial is the first to focus on how trademark 0:01:08.840 --> 0:01:11.440 rights will be applied to n f T s, and 0:01:11.480 --> 0:01:14.720 the outcome may have broader implications for whether n f 0:01:14.800 --> 0:01:18.360 t s are art or commercial assets. My guest is 0:01:18.440 --> 0:01:23.520 intellectual property litigator Terence Ross, a partner caton Uchen Rosenman. 0:01:23.880 --> 0:01:27.120 Terry set the stage for us about this trademark battle 0:01:27.319 --> 0:01:30.640 over the meta Burken n f T s So Hermes 0:01:30.760 --> 0:01:34.240 has put out for a decade now a type of 0:01:34.520 --> 0:01:37.560 pope bag for lack of better word that they branded 0:01:37.880 --> 0:01:41.640 the Birkin, and the Birken has literally become iconic in 0:01:41.640 --> 0:01:45.119 the fashion world. The least expensive one I could find 0:01:45.120 --> 0:01:49.520 online sold, but most of these are far more expensive 0:01:49.640 --> 0:01:52.760 and can run over a hundred thousand dollars each. The 0:01:52.960 --> 0:01:56.640 very high quality bag made out of only to find 0:01:56.640 --> 0:02:01.000 its materials, including esoteric things like ostrich and rocodile. The 0:02:01.200 --> 0:02:04.520 latches are made out of palladium or gold, you know, 0:02:04.640 --> 0:02:08.280 very expensive metal. The craftsmanship is absolutely the best in 0:02:08.280 --> 0:02:11.040 the world. It's a phenomenal handbag. Is to afford to 0:02:11.080 --> 0:02:14.000 spend that much for a tote bag. All the celebrities 0:02:14.040 --> 0:02:17.760 and brag about them. The Kardashians, Cardi b all have them. 0:02:17.840 --> 0:02:23.600 And so in December of one along comes a gentleman 0:02:23.639 --> 0:02:28.080 by the name of Ason Rothschild who is involved in 0:02:28.320 --> 0:02:32.440 fashion and art and entertainment in Los Angeles, and he 0:02:32.520 --> 0:02:36.600 puts out online what he describes as Meta Birken, and 0:02:36.639 --> 0:02:40.840 they are an FT non fungible token in the digital 0:02:40.840 --> 0:02:44.760 world of the metaverse. And for all practical purposes, they 0:02:44.800 --> 0:02:47.920 are a two dimensional image of the Birken in the 0:02:47.960 --> 0:02:50.520 form of n f T s. He embellished them in 0:02:50.560 --> 0:02:54.040 some ways trying to sell online m He finds out 0:02:54.040 --> 0:02:57.120 about this and the cease and desist letter accusing the 0:02:57.160 --> 0:03:00.240 trademark in the fringement, and when he refuses to comply 0:03:00.400 --> 0:03:04.320 with the season desist letter, Rmese files a lawsuit or 0:03:04.360 --> 0:03:07.280 trademark infringement and and other clauses of action in the 0:03:07.360 --> 0:03:10.040 United States District Card for the Southern District of New 0:03:10.120 --> 0:03:15.400 York as a January and a year later here we 0:03:15.440 --> 0:03:20.960 are beginning of February, and that lawsuit is now in 0:03:21.200 --> 0:03:24.200 trial in New York City in front of a jury. 0:03:24.480 --> 0:03:28.679 Or mist claims that consumers were duped into believing that 0:03:28.720 --> 0:03:32.760 the n f T s were created or endorsed by 0:03:32.760 --> 0:03:37.560 her mess. So this is fundamental to trademark law in 0:03:37.600 --> 0:03:42.640 the United States. Trademark law exists to protect consumers against 0:03:42.720 --> 0:03:47.640 being duped or tricked into buying goods or services under 0:03:47.840 --> 0:03:53.000 the mistaken assumption that they are being offered by someone 0:03:53.160 --> 0:03:56.000 other than the person actually offering. So in every trademark 0:03:56.000 --> 0:03:58.760 infringement case, it is necessary for the plant of the 0:03:58.800 --> 0:04:03.720 trademark owner. To establish what we call consumer confusion, you 0:04:03.720 --> 0:04:06.880 don't have to establish that every consumer is confused, just 0:04:06.880 --> 0:04:10.360 a significant portion of them, and most courts say that's 0:04:10.360 --> 0:04:13.160 in the range of ten to the consumers, depending on 0:04:13.440 --> 0:04:17.880 the type of good or service. And the argument here, 0:04:18.720 --> 0:04:22.159 which there seems to be some support for, is that 0:04:22.400 --> 0:04:27.560 people assume that Hermes had entered the metaverse and was 0:04:27.640 --> 0:04:31.880 putting out these meta berkins. There has been testimony that 0:04:32.040 --> 0:04:35.159 one Hermes executive was teaching a class at I think 0:04:35.200 --> 0:04:38.600 Columbia University in New York City and students came up 0:04:38.600 --> 0:04:43.240 to him after the class and asked about the new 0:04:43.279 --> 0:04:46.720 Hermes line meta burkins, and I think there are obviously 0:04:46.720 --> 0:04:49.200 the are Columbia University of smart kids, and you know, 0:04:49.200 --> 0:04:51.480 if they're being duped, that's the guest that the broader 0:04:51.520 --> 0:04:54.680 public probably is also being duped into thinking that somehow 0:04:54.720 --> 0:04:59.920 Hermes is affiliated or associated with these meta berkins. Rothschild said, 0:05:00.000 --> 0:05:03.120 as quote, my meta Berkin's project as a whole was 0:05:03.160 --> 0:05:06.599 an artistic experiment to explore where the value in the 0:05:06.680 --> 0:05:11.400 broken hand bag actually lies in the handcrafted physical objects 0:05:11.839 --> 0:05:14.920 or in the image it projects. So his story has 0:05:15.000 --> 0:05:18.200 changed over time. When he first put these out in December, 0:05:19.080 --> 0:05:23.960 he described them as a tribute to the iconic Hermes Berken. Apparently, 0:05:24.000 --> 0:05:27.240 after the lawsuit was filed and he got legal counsel, 0:05:27.760 --> 0:05:31.680 he started to describe the meta Berkins as a commentary 0:05:31.960 --> 0:05:36.559 on the fashion company's mistreatment of animals and a way 0:05:36.600 --> 0:05:40.680 to own a berkin without actually having to kill a 0:05:40.720 --> 0:05:44.599 crocodile and ostrich cow whatever the particular Berken is made 0:05:44.600 --> 0:05:47.960 out of. So the story shifted over time, and the 0:05:48.000 --> 0:05:51.520 reason for that is that the defense strategy is trying 0:05:51.600 --> 0:05:56.719 to bring itself within the Rogers v. Grimaldi test, which 0:05:56.760 --> 0:05:59.400 is a tricky test, and provide the First Amendment protection 0:05:59.440 --> 0:06:03.000 against trade mark infringement. And we've talked about that test before. 0:06:03.440 --> 0:06:06.200 There's a case before the Supreme Court that we discussed 0:06:06.360 --> 0:06:11.480 involving Jack Daniels and their trademark bottle. We have June 0:06:11.480 --> 0:06:14.479 talked about this before, and I think just in December 0:06:14.520 --> 0:06:17.479 when the case you're referring to, which goes by the 0:06:17.520 --> 0:06:20.440 title Jack Daniels Versus v. I P. Products, was first 0:06:20.480 --> 0:06:23.880 accepted by the Supreme Court, they granted cert cr on it. 0:06:24.120 --> 0:06:27.080 And it's one of the confusing things here clearly Jed 0:06:27.160 --> 0:06:30.680 Draycoss is the trial judge on this case. Very smart man, 0:06:30.920 --> 0:06:33.960 very good judge. You must know that the Supreme Court 0:06:34.000 --> 0:06:37.560 is considering the Rogers e. Grimaldi test, and I would 0:06:37.600 --> 0:06:39.520 have thought, indeed, if I were the judge, I would 0:06:39.520 --> 0:06:43.640 have simply stayed this lawsuit pending Supreme Court guidance on 0:06:43.720 --> 0:06:47.240 whether the Rogers test even exists anymore, and if it 0:06:47.279 --> 0:06:50.120 does exist, what are the parameters for it. When I 0:06:50.200 --> 0:06:53.240 heard about this, I thought, who would have bought these 0:06:53.360 --> 0:06:55.280 n f T s if it was you know, these 0:06:55.360 --> 0:06:59.400 fur lined bags not shaped like a birkin, but also 0:06:59.640 --> 0:07:03.800 about Andy Whirlhol's silk screens of Campbell soup cans. If 0:07:03.839 --> 0:07:08.080 this was a painting in a gallery of birken hambag, 0:07:08.240 --> 0:07:10.200 you know, would there be any question that it was 0:07:10.720 --> 0:07:14.200 considered art. So, June, I can't help you with the 0:07:14.320 --> 0:07:17.400 question of who it's bocking, and it's not just the 0:07:17.440 --> 0:07:22.120 meta Birken. I don't understand why anyone buys any n 0:07:22.160 --> 0:07:25.400 f T s, and I understand that some of these 0:07:25.600 --> 0:07:28.720 n f T s sold for as much as an 0:07:28.720 --> 0:07:32.360 actual Burken So I'd rather have the handbag. I agree 0:07:32.400 --> 0:07:35.440 with you as for the Campbell suit, the Andy Warhol 0:07:35.840 --> 0:07:40.280 famous painting. That has been a trope that the defense 0:07:40.440 --> 0:07:44.680 has trotted out from a very early point in the case. 0:07:44.960 --> 0:07:48.600 They want to sell the notion that this is artwork 0:07:48.960 --> 0:07:52.960 and therefore an expressive work within the Rogers test that's 0:07:52.960 --> 0:07:57.240 protected by the First Amendment. That argument took a body 0:07:57.320 --> 0:08:04.400 blow in trial when Arakoff barred the defenses expert witness 0:08:04.400 --> 0:08:08.120 from testifying that the Meta Berkins were nothing more than 0:08:08.160 --> 0:08:13.200 the digital equivalent of Andy Warhol's Campbell Soup painting. But that, 0:08:13.400 --> 0:08:16.920 in terms of trial strategy, was very serious blow to 0:08:16.960 --> 0:08:18.720 the defense and that they weren't going to be allowed 0:08:18.760 --> 0:08:21.360 to present this key witness and probably weren't going to 0:08:21.360 --> 0:08:24.000 be able to talk about the Campbell Soup argument. Why 0:08:24.040 --> 0:08:28.679 did Judge Rakoff make that decision, Well, the Supreme Court 0:08:28.760 --> 0:08:34.160 number of years ago established a very tough test for 0:08:34.240 --> 0:08:39.160 allowing expert witnesses to testify uh and under that test, 0:08:39.840 --> 0:08:43.560 the disrecord judge, the trial judge has to determine that 0:08:43.960 --> 0:08:47.520 first the witness is qualified in whatever field to gran testify. 0:08:47.559 --> 0:08:52.520 It too, that the opinion they intend to offer is 0:08:53.160 --> 0:08:59.319 um based on solid methodology and grounded in some form 0:08:59.559 --> 0:09:04.319 of scientific approach, and third that the results obtained by 0:09:04.400 --> 0:09:09.680 the expert in coming to opinion are replicable by other experts, 0:09:09.720 --> 0:09:14.600 because that's ultimately under science the way new theories are 0:09:14.800 --> 0:09:18.920 established and accepted in scientific community. Somebody does the procedure, 0:09:19.360 --> 0:09:22.400 reports upon it in a peer review journal. Other scientists 0:09:22.480 --> 0:09:24.760 go out, they repeat the exact procedure, and they come 0:09:24.840 --> 0:09:27.480 up with the same result that therefore it becomes accepted 0:09:27.520 --> 0:09:30.680 the scientific community. And what Judge ray Cost said here 0:09:30.760 --> 0:09:34.720 is you maybe have the qualifications and experience to offer 0:09:34.960 --> 0:09:38.280 expert testimony, but there's nothing about how you reached your 0:09:38.320 --> 0:09:41.839 opinion that's based through grounded in any scientific approach, let 0:09:41.880 --> 0:09:46.360 alone replicable by other experts, And therefore it doesn't pass 0:09:46.520 --> 0:09:50.280 the Supreme Court tests and I cannot allow it indevidence. 0:09:50.520 --> 0:09:53.640 And I thought Judge ray Costs decision was absolutely correct 0:09:53.760 --> 0:09:58.480 in that regard. He also said that the um as 0:09:58.480 --> 0:10:02.600 experts explanation of n f T S was over complicated 0:10:02.880 --> 0:10:05.800 and that the jury appeared puzzled to join the crowd. 0:10:06.120 --> 0:10:09.800 He said it was far more confusing than helpful. So 0:10:10.000 --> 0:10:13.640 this is the most common criticism of trial lawyers that 0:10:13.679 --> 0:10:17.000 you get from juries and individual drawers. When you interviewed. 0:10:17.000 --> 0:10:19.960 The map to this fact built my career on the 0:10:19.960 --> 0:10:23.480 ability to explain very complex things in very simple ways 0:10:23.679 --> 0:10:26.880 to lay people such as jurors or judgets. That is unusual. 0:10:27.280 --> 0:10:30.720 The vast majority of trial lawyers in the intellectual property 0:10:30.760 --> 0:10:35.800 space seemed to um fall into the trap of over 0:10:35.880 --> 0:10:43.040 explaining in very unnecessary detail how things work. And n 0:10:43.080 --> 0:10:46.320 f t s are fundamentally about digital source codes, and 0:10:46.679 --> 0:10:49.240 the lawyers and the expert they put on explained this 0:10:49.840 --> 0:10:52.880 when did the great detail about how would write source 0:10:52.920 --> 0:10:56.720 code and and about digital coding and things that were 0:10:56.720 --> 0:10:59.640 really unnecessary instead of talking about n f T s 0:10:59.640 --> 0:11:02.160 in the way that most human beings talk about it 0:11:02.480 --> 0:11:05.960 in in terms of analogies to real world objects. You know. 0:11:06.040 --> 0:11:07.800 Of day one of the trial, of the of the 0:11:07.840 --> 0:11:10.160 evidence of the trial, it seemed like both sides suffered 0:11:10.280 --> 0:11:13.360 significant blows. The loss of the expert was a blow 0:11:13.440 --> 0:11:18.000 the defense um this dreadful approach to testifying about explaining 0:11:18.160 --> 0:11:22.120 fts by the planets expert was a mistake and a 0:11:22.160 --> 0:11:24.559 blow to their case. So neither side got off to 0:11:24.679 --> 0:11:27.720 quick starts in this trial. So I mean, what does 0:11:28.000 --> 0:11:32.960 ers have to prove that it's confusing? In the marketplace 0:11:33.760 --> 0:11:36.560 that it's like, you know, the rip off handbags that 0:11:36.640 --> 0:11:39.360 we see on the street. What exactly is is its 0:11:39.520 --> 0:11:43.680 burden of proof? Hear the law, the land of Act 0:11:43.760 --> 0:11:46.959 is the name of the trademark law in the United States, 0:11:47.080 --> 0:11:52.040 and it prohibits anyone from and I'm just reading here 0:11:52.040 --> 0:11:58.840 now causing confusion or deceit as to affiliation, connection, or 0:11:58.920 --> 0:12:05.000 association in or as to origin, sponsorship, or approval of 0:12:05.160 --> 0:12:09.640 their goods or services with a trademark because their services. 0:12:10.000 --> 0:12:15.000 And so you have to show that the consuming public, 0:12:15.720 --> 0:12:21.000 which I think would be someone in the luxury goods marketplace, 0:12:21.480 --> 0:12:25.760 that the consuming public would be thinking that somehow the 0:12:25.800 --> 0:12:31.760 meta burkin was affiliated with, connected with, associated with, sponsored by, 0:12:31.960 --> 0:12:36.800 or approved by Hermes. And so what we're in here 0:12:36.840 --> 0:12:40.160 a lot of is testimony on the planet side of 0:12:40.320 --> 0:12:46.160 instances in which consumers reported that sort of confusion to them. 0:12:46.200 --> 0:12:49.199 And the example of this one executive going and teaching 0:12:49.240 --> 0:12:53.480 at Colombian being approached by students about the Hermes new 0:12:54.120 --> 0:12:58.040 meta burkin is a classic example of the sort of 0:12:58.280 --> 0:13:02.480 consumer confusion that's required to established trademark infringement. And we'll 0:13:02.480 --> 0:13:04.200 just have to wait for the trial to go on 0:13:04.600 --> 0:13:06.280 to see how much more of that is and then 0:13:06.280 --> 0:13:08.280 it will be up to the jury to decide whether 0:13:08.320 --> 0:13:12.120 that's sufficient or not. And then there's the Rogers v. 0:13:12.200 --> 0:13:15.720 Grimaldi test, which would be a defense even if there 0:13:15.840 --> 0:13:20.040 was consumer confusion. So if this jury believes that these 0:13:20.200 --> 0:13:24.080 n f T s are in fact art, then the 0:13:24.120 --> 0:13:27.880 defense would win. So let's just remember what the Rodgers v. 0:13:28.000 --> 0:13:30.480 Grimaldi test is all about and remind people even then. 0:13:30.520 --> 0:13:33.000 We just did an episode in the back in December. 0:13:33.080 --> 0:13:36.920 This was a lawsuit by Ginger Rogers, the famous dancer, 0:13:37.520 --> 0:13:40.760 against the producers of a movie who had titled the 0:13:40.800 --> 0:13:43.000 movie Friend and Ginger I think was the name of 0:13:43.040 --> 0:13:45.640 Ginger referring to her. Went up on appeal of Second Circuit, 0:13:47.080 --> 0:13:50.360 and they held that the use of a celebrity name 0:13:51.080 --> 0:13:55.880 in an expressive work, if artistically relevant to that expressive 0:13:55.880 --> 0:14:00.200 work and not intentionally misleading, is protected on of the 0:14:00.200 --> 0:14:03.120 First Amendment against trademark infringement. And so it was a 0:14:03.160 --> 0:14:06.480 relatively narrow ruling. You know, it was limited to US 0:14:06.559 --> 0:14:12.480 celebrity names. It's been expanded beyond that to a broader 0:14:12.559 --> 0:14:17.080 range of trademarks. But again, the requirement has always been 0:14:17.160 --> 0:14:19.640 in connection with the use of that trademark connection with 0:14:20.000 --> 0:14:25.480 an expressive work, if it's really artistically necessary to use 0:14:25.560 --> 0:14:31.480 that trademark, and if it's not misleading, intentionally misleading, And 0:14:31.760 --> 0:14:34.240 there's a lot of factual predicates there that and facts 0:14:34.280 --> 0:14:37.320 are determined by jury, not judges or lawyers. And so 0:14:37.480 --> 0:14:40.240 the first thing juries going to have to decide is 0:14:40.520 --> 0:14:43.040 whether or not the Meta Birkin is an expressive work. 0:14:43.200 --> 0:14:47.760 And that's why you see the plainiff trying to push 0:14:47.840 --> 0:14:50.680 the notion that Mr ross Shaw was just about to 0:14:50.720 --> 0:14:53.560 make money here, and you see on the other side, 0:14:53.600 --> 0:14:56.120 on the defense side, the argument Mr Rothschild is an 0:14:56.200 --> 0:14:58.560 artist and this is an artistic work. I mean, they 0:14:58.600 --> 0:15:00.720 want to bring it within this Rodgers test and the 0:15:00.760 --> 0:15:04.640 requirement established it was an expressive work and artistically relevant, 0:15:05.080 --> 0:15:08.320 not intentionally misleading. And we'll just have to see how 0:15:08.320 --> 0:15:10.200 that plays out. I mean, Judge Rakoff said on a 0:15:10.240 --> 0:15:12.680 motion to dismiss brought by the dependants that he thought 0:15:12.840 --> 0:15:16.240 Rogers v. Grimaldi applied here. I think there's a big 0:15:16.320 --> 0:15:19.600 question mark about that. The case accepted by the Supreme Court, 0:15:19.880 --> 0:15:21.800 which came out of the Ninth Circuit is the very 0:15:21.840 --> 0:15:25.040 first case in which the Rogers test was applied to 0:15:25.080 --> 0:15:28.040 a commercial product there it was a dog shoot toy, 0:15:28.240 --> 0:15:31.760 and other circuit courts have consistencies. Was said that Rogers 0:15:31.960 --> 0:15:34.600 test is not applied to commercial products. N f T 0:15:34.800 --> 0:15:37.440 s are really a type of commercial product. And that's 0:15:37.440 --> 0:15:40.800 why this is at the intersection of technology and art. 0:15:41.000 --> 0:15:42.920 I mean, is the n f T work of art? 0:15:43.160 --> 0:15:46.560 Is it? Technology is a bunch of source code? I mean, 0:15:46.640 --> 0:15:49.520 what is it? And I think Judge Rickoff may have 0:15:49.560 --> 0:15:52.080 sort of jumped the gun by saying that the Rodgers 0:15:52.120 --> 0:15:54.000 test applies when I think there's a lot of factual 0:15:54.040 --> 0:15:56.200 issues about that. And I really think it's going to 0:15:56.240 --> 0:15:59.040 depend on what Supreme Court says in the Jack Daniels case, 0:15:59.040 --> 0:16:01.200 because the Supreme Court good one option for them is 0:16:01.240 --> 0:16:03.040 to say, hey, you know, there is no such thing 0:16:03.040 --> 0:16:05.440 as Roger's test that was made up by a court 0:16:05.600 --> 0:16:08.960 that's not in the statute. Statute already has a fair 0:16:09.040 --> 0:16:11.480 use test that should be applied instead of this Roger's test. 0:16:11.920 --> 0:16:13.640 I don't know what's going to happen. That's why I 0:16:13.640 --> 0:16:15.840 think it's very curious to allow this case to go 0:16:15.960 --> 0:16:19.360 forward when it all could become moot in June. Which 0:16:19.400 --> 0:16:22.280 side do you think has the better argument. Which side 0:16:22.320 --> 0:16:26.080 would you rather be representing? I always prefer repressing the 0:16:26.120 --> 0:16:28.960 side that has the money to pay me, and I 0:16:29.000 --> 0:16:31.880 doubt Mason rots Sound has that money is apparently using 0:16:32.160 --> 0:16:34.160 a new law firm that I think it's sort of 0:16:34.160 --> 0:16:37.000 a public interest type firm called Lex Lumena. But as 0:16:37.000 --> 0:16:38.920 far as the law and the fact this is the case, 0:16:39.000 --> 0:16:41.560 the first impression, I think it's fair to say my 0:16:41.680 --> 0:16:45.920 gut reaction is that the Hermes side of the argument 0:16:46.360 --> 0:16:50.200 is a bit stronger. Particularly, I don't like the way 0:16:50.280 --> 0:16:53.600 that the defendant story kept changing over time, apparently in 0:16:53.760 --> 0:16:56.320 a sort of post hoc attempt to fit itself within 0:16:56.320 --> 0:16:58.360 the Rogers test. You lawyer up and you go, oh, 0:16:58.440 --> 0:16:59.760 you know what I should have been saying all along, 0:17:00.040 --> 0:17:02.640 that this is artistically relevant, is an expressive work. I'm 0:17:02.640 --> 0:17:04.280 not just trying to make money less. I mean, they 0:17:04.280 --> 0:17:06.399 seem to be trying to force fit this into the 0:17:06.480 --> 0:17:11.159 Rogers test, and I not so sure that it fits. 0:17:11.280 --> 0:17:17.000 Quite Frankly, who would buy this if it didn't have 0:17:17.080 --> 0:17:18.960 the burke In name on it? If these were just 0:17:19.080 --> 0:17:22.800 called handback, would any consumer actually buy these? I mean, 0:17:22.880 --> 0:17:27.200 isn't it the association with the Birkin iconic handbag that 0:17:27.680 --> 0:17:31.399 makes it purchasable and people interested in it. I don't know. 0:17:31.440 --> 0:17:33.720 I mean, it's an interesting question. This case to be 0:17:33.760 --> 0:17:36.679 a game change. You're right, this is a really important 0:17:36.760 --> 0:17:42.120 case to trademark law as the metaverse expands and more 0:17:42.160 --> 0:17:44.960 companies move into it. And we've heard a lot of 0:17:45.000 --> 0:17:47.960 testimony already, and her Knees has plans to move into 0:17:47.960 --> 0:17:51.680 the metaverse, and therefore this would directly impact their ability 0:17:51.760 --> 0:17:54.760 to do that. We need to probably update the Land 0:17:54.800 --> 0:17:57.760 of Act to really address this sort of issue. You're 0:17:57.760 --> 0:18:00.399 absolutely right, June. It is a cutting edge haste and 0:18:00.960 --> 0:18:03.159 just the first of many. I think we're seeing this field. 0:18:03.440 --> 0:18:06.640 We'll keep track of what happens here, and that Jack 0:18:06.720 --> 0:18:09.640 Daniels case is going to be heard by the Supreme 0:18:09.680 --> 0:18:14.320 Court on March two, so maybe we'll learn more about 0:18:14.440 --> 0:18:17.520 their take on the Rogers test at that point. Thanks 0:18:17.520 --> 0:18:21.439 so much, Terry. That's intellectual property litigator Terence Ross, a 0:18:21.520 --> 0:18:27.760 partner at Caton Euten Rosenman. Republican state attorneys general are 0:18:27.840 --> 0:18:32.200 trying to kill a climate friendly retirement investment rule they 0:18:32.280 --> 0:18:35.840 derived as WOKE. More than two dozen states are suing 0:18:35.880 --> 0:18:39.560 to block the rule which permits private sector employers to 0:18:39.640 --> 0:18:45.360 consider environmental, social, and corporate governance factors when choosing pension investments, 0:18:45.800 --> 0:18:49.720 and the US Labor Department is facing litigation deja vu 0:18:50.200 --> 0:18:53.119 because it has to defend its rule in a conservative 0:18:53.200 --> 0:18:58.840 Texas jurisdiction known for striking down consequential employee benefit regulations. 0:18:59.480 --> 0:19:02.480 Will his to re repeat itself? Joining me to answer 0:19:02.560 --> 0:19:05.879 that question is Josh Lichtenstein, partner and head of the 0:19:05.880 --> 0:19:09.880 ARISCA fiduciary practice at Ropes and Gray. So, Josh tell 0:19:10.000 --> 0:19:13.760 us about this rule that's being challenged. The rule that 0:19:13.800 --> 0:19:16.920 we're talking about here, it's often referred to as an 0:19:16.920 --> 0:19:20.040 e x G investing rule, but it's really broader than that. 0:19:20.440 --> 0:19:24.280 This is actually a rule that governs the way that 0:19:24.960 --> 0:19:28.879 produciaries to arista plans, and that's both the traditional defined 0:19:28.960 --> 0:19:32.679 benefit pensition plans and define contribution plans like a following 0:19:32.720 --> 0:19:35.359 Cave plan. It's the rule that governs the way that 0:19:35.440 --> 0:19:40.480 produciaries to those plans make all of their investment decisions. 0:19:40.520 --> 0:19:45.560 And so the rule will cover how plan produciaries select 0:19:45.680 --> 0:19:48.800 a particular fund that they either want to invest assets 0:19:48.840 --> 0:19:52.600 in or want to make available to four along participants, 0:19:52.640 --> 0:19:56.879 and it goes to how they're supposed to determine what 0:19:57.000 --> 0:20:01.880 criteria are relevant interesting those funds, and then how they're 0:20:01.920 --> 0:20:06.840 supposed to wait those criteria. And while people are generally 0:20:06.840 --> 0:20:09.879 thinking about this in terms of whether a plan sponsor 0:20:10.119 --> 0:20:13.800 can use E s G factors as part of their 0:20:13.840 --> 0:20:16.919 investment decision or not, it's really much broader than that, 0:20:17.000 --> 0:20:21.280 and it goes to every financial or potentially financial factor 0:20:21.840 --> 0:20:26.960 that might be utilized by a plan producer. So Texas 0:20:27.040 --> 0:20:33.960 and other Republican led states are suing, what are their allegations, 0:20:34.080 --> 0:20:37.800 what's their cause of action? Basically it's very interesting, right, 0:20:38.000 --> 0:20:39.800 you know, And I think that this is important to 0:20:39.840 --> 0:20:41.640 sort of be clear about because there are a lot 0:20:41.680 --> 0:20:47.080 of headlines about various of these states, including Texas, having 0:20:47.119 --> 0:20:50.960 passed laws the government how their own retirement plans get invested. 0:20:51.600 --> 0:20:55.480 And generally speaking, you know, these laws are limiting the 0:20:55.520 --> 0:20:59.360 ability to use E s G considerations for ind USTs 0:20:59.359 --> 0:21:03.800 and purposes is or are restricting the state pensions from 0:21:03.840 --> 0:21:07.840 investing with certain asset managers based on levels of participation 0:21:08.119 --> 0:21:12.480 in certain industries like the uscile fuels industry. But the 0:21:12.520 --> 0:21:17.000 Department of Labor's rule does not actually impact those government 0:21:17.080 --> 0:21:20.280 plans are making all of these headlines. The Department of 0:21:20.359 --> 0:21:24.639 Labor's rule only impacts private pension plans. Of these are 0:21:24.680 --> 0:21:28.080 pension plans that are either maintained by a private employer 0:21:28.680 --> 0:21:32.199 or that are maintained by a union that covers employees 0:21:32.200 --> 0:21:36.960 of private employers. So it's not obvious necessarily, you know, 0:21:37.280 --> 0:21:39.320 why it would be the States that would want to 0:21:39.320 --> 0:21:42.840 bring a lawsuit like this because doesn't directly impact their plans. 0:21:43.000 --> 0:21:46.479 You know, what the States are claiming at heart as 0:21:46.480 --> 0:21:48.320 the basis for why they should be able to sue 0:21:48.840 --> 0:21:52.800 is an alleged detrimental impact on residents of the states 0:21:52.840 --> 0:21:55.400 and on the tax receipts of the states. But there 0:21:55.400 --> 0:21:57.720 are also some private plaintiffs, you know, that are part 0:21:57.760 --> 0:22:01.400 of the suit, and there's ending might be somewhat more 0:22:01.440 --> 0:22:05.239 obvious as a plan sponsor alleging that they will be 0:22:05.440 --> 0:22:08.000 um you know, more work and more costs associated with 0:22:08.160 --> 0:22:11.679 money their plan under the rule of plan participants and 0:22:11.880 --> 0:22:15.920 energy company. But at heart, what all of these allegations 0:22:16.040 --> 0:22:21.400 really are about. They're basically allegations that the rule put 0:22:21.480 --> 0:22:25.399 forward by the Biden administration's Department of Labor will have 0:22:25.600 --> 0:22:31.200 the effects of devoting more retirement assets towards E S G. 0:22:31.359 --> 0:22:36.600 GOLs and away from the fossil fuels industry and certain 0:22:36.640 --> 0:22:40.040 other sectors, and that that will have a detrimental impact 0:22:40.200 --> 0:22:43.320 on the states that are joining this letter, and that 0:22:43.440 --> 0:22:46.960 it would be sort of a being appropriate use of 0:22:47.000 --> 0:22:53.000 retiring assets to pursue non retirement related goals. I know, 0:22:53.119 --> 0:22:57.080 I started this answer by saying that the duos rules 0:22:57.119 --> 0:22:59.520 do not govern the state plans, and that's correctly, it's 0:22:59.560 --> 0:23:03.600 not covering them. But it's interesting the state laws that 0:23:03.720 --> 0:23:07.159 government state pension plans are all modeled on the federal law. 0:23:07.200 --> 0:23:11.120 They're all modeled on ARISSA, and so the Biden administration 0:23:11.480 --> 0:23:14.240 and many of these states that are involved in this 0:23:14.359 --> 0:23:19.320 lawsuit have actually themselves come to very different interpretations of 0:23:19.359 --> 0:23:23.760 the same statutory language around few Sharry standards, and so, 0:23:24.680 --> 0:23:27.280 you know, sort of separate and apart from the question 0:23:27.680 --> 0:23:31.120 about the interests of the states have in directly bringing 0:23:31.800 --> 0:23:36.359 this lawsuits, they're sort of a secondary question of who 0:23:36.440 --> 0:23:42.000 really has the right interpretation of this statutory language when 0:23:42.040 --> 0:23:44.080 you have multiple government bodies, you know, at the state 0:23:44.080 --> 0:23:46.840 in paral level, interpreting the same language that brings up 0:23:46.840 --> 0:23:50.240 a couple of things. The Texas Attorney General Can Paxton 0:23:50.440 --> 0:23:54.320 said that this kind of investing what's hard working Americans 0:23:54.400 --> 0:23:59.960 retirement savings at risk. The rule reverses restrictions on socially 0:24:00.119 --> 0:24:04.640 conscious investing that we're adopted by the Trump administration. Can 0:24:04.680 --> 0:24:08.240 you compare the rules for US? So, I find the 0:24:08.280 --> 0:24:13.760 allegations in the complaints to be somewhat opposite to what 0:24:14.000 --> 0:24:17.520 my read of the actual rule is, because the allegations 0:24:17.520 --> 0:24:21.400 of the complaints are basically that the Department of Labor's 0:24:21.440 --> 0:24:26.040 current rule will have the effect of making it more 0:24:26.080 --> 0:24:30.639 difficult and more costly for planned sponsors to have to 0:24:30.840 --> 0:24:35.159 evaluate different investment options, and that it will have the 0:24:35.200 --> 0:24:41.439 effect of driving more assets into e s G type funds. 0:24:41.480 --> 0:24:44.520 But I think that the reality is that the Biden 0:24:44.520 --> 0:24:48.080 administration's rule is very neutral. I actually think it's the 0:24:48.119 --> 0:24:50.640 most neutral version of this guidance that we have seen 0:24:50.720 --> 0:24:52.680 from the Department of Labor, and the Department of Labor 0:24:52.880 --> 0:24:56.920 has been putting guidance out on this topic for decades, 0:24:57.240 --> 0:24:59.600 literally for decades. It may have the longest history of 0:24:59.640 --> 0:25:02.119 any of you US regulator regulating the E s G 0:25:02.320 --> 0:25:06.159 type investment decisions, and the guidance has gone back and 0:25:06.240 --> 0:25:10.040 forth over time as administrations have changed, but you know, 0:25:10.080 --> 0:25:12.879 there's sort of core principles that have been in the 0:25:12.880 --> 0:25:17.320 guidance from the start. I've really been that fiduciaries are 0:25:17.359 --> 0:25:19.800