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Jessica Bell, Kalus Kenny Intelex, Melbourne, Australia
On 15 July 2026, the Australian Government announced a new policy direction for the governance of artificial intelligence (AI). The proposed framework includes mandatory national standards for AI, regulation of data centres, and the immediate establishment of an Office of AI to design and implement these governance mechanisms. Of particular significance from an intellectual property perspective, the policy positions copyright as a central pillar of Australia’s AI governance framework, signalling a stronger commitment to protecting copyright interests.
Better copyright protection
For several years, Australia’s creative industries have expressed concern about the use of copyrighted works to train artificial intelligence (AI) models. Much of this concern centres on text and data scraping, whereby AI developers collect and process large volumes of online content for training purposes, including copyright-protected Australian works.
The Australian Government has progressively signalled a stronger policy position in response. In October 2025, it confirmed that it would not introduce a text and data mining exception to copyright infringement, thereby declining to create a statutory basis for AI developers to use Australian copyright works for training without permission.
The Government has now moved a step further. Under its proposed AI governance framework, copyright owners will retain ownership and control of their works, with future legislation intended to put that position beyond doubt. The proposed reforms would expressly prohibit AI systems from training on Australian copyright works without authorisation, reinforcing that decisions about whether a work may be used, and on what commercial terms, remain with the copyright owner.
Although no implementation date has been confirmed, the reforms are expected to be introduced as early as 2027.
Practical implications and unresolved questions
Despite the Government’s clear policy direction, several practical and legal questions remain unresolved. As the legislative framework is developed, a number of issues are likely to attract close scrutiny:
· Legacy AI models and market competition
Many existing AI models have already been trained on vast datasets that include creative works. The proposed framework therefore raises questions about competitive neutrality. If established AI developers are permitted to retain the commercial advantages of models trained before the new requirements take effect, while new market entrants must comply with more stringent obligations, the reforms may inadvertently create higher barriers to entry and reinforce the position of incumbent developers.
· Learning from works versus copying works
Copyright protects the expression of an idea, rather than the idea itself. AI systems generally learn patterns, styles and relationships from training material rather than reproducing works verbatim. As a result, questions remain as to whether the proposed reforms will adequately address outputs that closely imitate protected works through style, motifs, themes or other recognisable creative elements without amounting to copyright infringement in the traditional sense.
· International enforcement
The practical effect of the reforms may ultimately depend on their application to overseas AI developers. Many leading AI models are developed and trained outside Australia, raising questions about how the legislation will be enforced against foreign entities and whether Australian copyright owners will have effective remedies where infringing training occurs offshore.
Equally, if AI developers are required to obtain permission before using Australian copyright works for training, the reforms may accelerate the development of licensing markets. This raises further questions about how licences will be negotiated, whether collective licensing models will emerge, and whether smaller creators will have meaningful bargaining power alongside larger rights holders.
· The pace of AI development
Perhaps one of the biggest challenges is the speed at which AI technology is evolving compared with the relatively slower pace of legislative reform. By the time the new framework is implemented, AI tools and development practices may look substantially different from those that informed the policy debate. The legislation will therefore need to strike a careful balance between providing certainty for copyright owners and AI developers, while remaining flexible enough to accommodate future technological change.
So, what next?
The Government’s next steps will be critical in shaping the future of Australia’s AI landscape. The legislative and regulatory mechanisms ultimately adopted will have significant commercial implications for AI developers, particularly in relation to the training and deployment of AI models.
In introducing stronger copyright protections, the Government will need to navigate the competing objectives of protecting creators’ rights while supporting the continued growth of Australia’s AI sector. Achieving a sustainable framework will require a careful balance that provides meaningful protections for copyright owners without creating unnecessary barriers to responsible innovation and competition.
The creative industries and AI sector will undoubtedly continue to closely monitor the development of the proposed reforms and their practical impact. As the details of the framework emerge, the coming months will be critical in determining whether Australia’s approach can achieve that balance.
SokolskyFilm, Fair Use, and Why Context Might Soon Be Everything In Copyright
By James P. Flynn, Epstein Becker Green
They give us those nice bright colors/Give us the greens of summers
Makes you think all the world’s a sunny day, oh yeah/I got a Nikon camera
I love to take a photograph/So momma don’t take my Kodachrome away
[KodaChrome by Paul Simon]
When the U.S. District Court for the Central District of California decided SokolskyFilm, Inc. v. Lauren Messiah Inc. on June 16, 2026, a few familiar phrases came to mind, with some of my own twists joining them. For instance, I thought of “a picture is worth a thousand words,” but a thousand words of surrounding context might diminish that photo’s worth to the photographer. Likewise, Helen’s may have been a face that “launched a thousand ships,” but this decision is one that will launch a thousand questions. And its beauty will remain, as it often does, in the eye of the beholder.
That is because SokolskyFilm should interest anyone who believes that copyright protection for photographs matters, especially for original, creative photographic works. The SokolskyFilm court held a blogger’s unattributed and unlicensed use of a full, unmodified Sokolsky photograph (known as the Parker Train Photo) constituted fair use under 17 U.S.C. § 107. Photographers and their counsel reading the printed words in this opinion might very well conclude that “everything looks worse in black and white,” as Paul Simon would say (or sing).
Before diving into the legal analysis, let’s set the context (an intentionally chosen word as you will see).
In October 1962, Melvin Sokolsky was an internationally recognized fashion photographer whose work had graced the Museum of Modern Art and the Louvre. He took a photograph at that time that would eventually, as noted above, become known as the “Parker Train Photo.” It captured the interior of a train car with passengers in what appeared to be vintage clothing, shot in the photographer’s distinctive style. The image was taken as part of a larger photoshoot, and a portion of the photo was later featured in a 1963 McCall’s Magazine advertisement for women’s fashions titled “Cloak and Swagger Fashions.” Decades later, in 2000, that same photograph appeared in Seeing Fashion, a book compiling Sokolsky’s photographic work, and was registered with the U.S. Copyright Office.
Fast forward to November 2009. Lauren Messiah, a fashion blogger and aspiring style maven, conducted a Google Images search for “army fashion” and found the Parker Train Photo. She downloaded it, saved it to her desktop with the filename “melvin-sokolsky5.jpg.” That filename, obviously, embedded the photographer’s name, yet she posted it to her “Ask Fashion Kitty” blog without license or attribution in a post titled “Style Suggestions for Army Wives.”
She did not modify the photograph in any way
She simply surrounded it with text.
The blog post asked the question: “How should she dress when greeting her husband coming back from deployment?” and Messiah answered with styling tips. The Parker Train Photo, unaltered and in its entirety, sat in the middle of this fashion advice like a visual full stop. Over the course of her career, Messiah’s styling courses, coaching services, and books generated millions of dollars in revenue. The blog post featuring the Parker Train Photo remained online until August 2025, when Messiah deleted it only after receiving a cease-and-desist letter from Sokolskyfilm, Inc.
Then Sokolskyfilm, Inc. sued her, in essence saying (as our title suggests) that this blogger should not be able to take this KodaChrome away without pay and/or okay—in other words, the blogger needed a license. But Sokolskyfilm, Inc. lost.
Why?
Context transformation.
Understanding what context transformation means and how the court got there requires one to understand the copyright concept of fair use, which this blogger has written about many times over the years (such as here, here, here, here, here, and here, for example)
Copyright fair use analysis turns on four statutory factors, as established in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994):
A substantial body of jurisprudence on these factors exists, particularly in cases involving photographs, images, and visual works. As was noted here in 2025, context and commentary influence fair use analysis. That analysis turned on a relatively straightforward principle: if you take someone else’s work and use it for a transformative purpose (such as criticism, commentary, news reporting, teaching), you have a plausible fair use defense. But transformation, in the traditional sense, typically meant changing the work: adding voiceovers, editing, contextualizing within a different medium, or substantially altering its form or message.
SokolskyFilm appears to pivot on a different axis entirely.
Let me walk through each factor as the court analyzed it:
SokolskyFilm found that Messiah’s blog post was “transformative” because it provided “fashion guidance rather than commentary on what is already apparent from the Photo.” In other words, SokolskyFilm found that the use had a “further purpose or different character” than the photograph itself. The fact that the photograph was displayed in a blog post offering styling advice (alongside a question-and-answer format about what an Army wife should wear) meant, for this court, that the use was transformative, even though the photograph itself remained entirely unmodified.
This is where SokolskyFilm begins to diverge from conventional fair use analysis. Traditionally, a photograph or other work published in a context where it receives “new” commentary or receives a secondary use has been analyzed cautiously.
For instance, in Harper & Row v. Nation Enterprises, 723 F.2d 195, 209 (2d Cir. 1983), the court held that reproducing portions of President Gerald Ford’s unpublished memoirs in a news article was fair use because “[t]he magazine took a meager, indeed an infinitesimal amount of Ford’s original language,” which the court found was “a circumscribed use of copyrighted words.” But the 2nd Circuit emphasized that publication context alone did not transform the work itself. Id. at 207 (“mere allegations of news reporting are insufficient grounds for permitting the copying of the expression in a protected work”). Yet, SokolskyFilm cites Harper & Row as support for its decision (at 7).
Similarly, fair use was found in L.A. News Serv. v. CBS Broadcasting Inc., 305 F.3d 924 (9th Cir. 2002), but that finding was based on a transformation of the original work itself. Id. at 939-40 (describing opening montage and its transformative aspects). That court emphasized that mere re-use is not transformative fair use (“We have previously held that despite the newsworthiness of LANS’s riot videos, their mere rebroadcast was not in itself transformative…. Merely plucking the most visually arresting excerpt from LANS’s nine minutes of footage cannot be said to have added anything new.”) (emphasis in original) Yet, SokolskyFilm also cites this case (at 7).
The reasoning echoes language from Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013, a case involving appropriation art (a topic we have addressed before, and as to which courts have held that transformative uses can insulate themselves from market-harm findings). But in Cariou, the defendant-artist had substantially modified the underlying photographs. Id. at 708 (“In twenty-five of his artworks, Prince has not presented the same material as Cariou in a different manner, but instead has ‘add[ed] something new’ and presented images with a fundamentally different aesthetic.”).
Sokolskyfilm permitted the same result without modification.
SokolskyFilm acknowledged that the Parker Train Photo is a creative work: a fashion photograph taken by an internationally recognized artist. Under established precedent, creative works (as opposed to factual compilations or purely informational materials) receive greater copyright protection. This factor weighed against a finding of fair use. But the court minimized this factor’s significance, noting “’typically [this factor] has not been terribly significant in the overall fair use balancing.”’ Id. at 9-10 (quoting Dr. Seuss Enters., LP v. Penquin Books, USA, Inc., 109 F.3d 1394, 1402 (9th Cir. 1997)).
Here is where SokolskyFilm’s implications become most provocative. The SokolskyFilm court found that, while Messiah posted the “unaltered Parker Train Photo” and thus displayed the “heart” of the photograph, the photograph was “rendered insubstantial in context” because “the Parker Train Photo is the only photo in the blog post, but it is accompanied by a question-and-answer completely independent of the Photo.” Id. at 10 (emphasis added).
Let that sink in: the full, unmodified photograph (in other words, the entire creative work) was deemed “insubstantial in context,” even when it was the greater work’s only visual art image. And strangely, the court emphasized that the original content from Messiah was “completely independent of the Photo.” Thus, one could argue that using the photo was unnecessary to the creative enterprise in which Messiah was engaged. It also suggests that if Messiah had been an art photography historian or critic, and devoted the same amount of text to detailed original criticism or analysis of the unmodified photo, this court would have found the context tilting against a finding of fair use (on the theory that if complete independence is transformative, complete dependence cannot be). But that would seem a very odd perspective to anyone seeing the words “for purposes such as criticism, comment, news reporting, teaching…, scholarship, or research” in the express statutory definition of fair use.
SokolskyFilm noted that Messiah’s use did not “directly compete[] with” nor had it” completely usurped” the plaintiff’s market for publishing and licensing the Parker Train Photo. The court emphasized that Messiah’s blog post served a different market function (fashion advice) whereas SokolskyFilm’s market was “fine art,” with licenses reaching as much as $5,000 per use.
The implications here are significant. In Campbell v. Acuff-Rose, 510 U.S. 569 (1994), the Supreme Court held that the inquiry into fair use is inherently flexible and contextual. Id. at 578. This means that the four factors must be weighed together, and no single factor is dispositive. Id. But the Court also made clear that a transformative use is central to the fair use inquiry. Id. at 579.
SokolskyFilm appears to expand what is “transformative” to encompass not just the modification of a work, but the recontextualization of it. This is provocative because it means, in theory, that a photographer’s copyright in an original photograph could be overcome by a fair use defense, regardless of whether the photograph itself is modified. Thus, assuming it appears in a sufficiently different context, surrounded by sufficient new commentary or creative text, the the conclusion would be “fair use.”
Think about the implications: A commercial website could republish a full fashion photograph with new styling commentary and potentially claim fair use. An educational blog could post an entire news photograph with an analytical essay surrounding it. A lifestyle influencer could repost an artist’s photograph in a “mood board” post with lifestyle tips.In each case, the photograph remains untouched. But under SokolskyFilm‘s logic, the context provides the transformation.
More provocatively: the third factor of the Campbell test (the amount and substantiality of the portion used) appears to lose much of its teeth when the court can deem a work “insubstantial in context.” If context can minimize the apparent substantiality of a full reproduction, then photographers and visual artists face a unique vulnerability. Unlike a musician whose song cannot easily be rendered “insubstantial” by surrounding commentary, or an author whose text dominates any surrounding analysis, a photograph can be visually subordinated by enough textual explanation or styling advice.
The strange, shadowed lighting cast over SokolskyFilm’s analysis comes from Andy Warhol Foundation v. Goldsmith, 143 S.Ct. 1258 (2023). In that Supreme Court decision, the Court held that the Andy Warhol’s silkscreen prints, created from Lynn Goldsmith’s original photographs, were not fair use, despite the Warhol Foundation’s argument that the works were sufficiently transformative. The Supreme Court in Warhol emphasized that purpose and market function matter. According to the Supreme Court majority opinion, Warhol had used Goldsmith’s photographs for the same commercial purpose as Goldsmith, which was to create high-end art for licensing and sale. Transformation in appearance or aesthetic quality was not enough; transformation must go to market function and purpose. Indeed, for the Warhol majority, “’ conveying[ing] a new meaning or message’ is not enough for the first factor to favor fair use.’” 143 S.Ct. at 1304 (Kagan, J, dissenting, and quoting majority at 1285-66).
Now consider SokolskyFilm: Messiah selected another’s fashion photograph and used it in her own blog post offering styling advice. The photograph’s original purpose in Seeing Fashion was to showcase Sokolsky’s photographic artistry. Its new purpose was to illustrate fashion tips. These are different market functions. Messiah used the photograph functionally differently. In other words, the use was not just aesthetically different, but for a different purpose. On this reading, one might see SokolskyFilm as aligning itself with the Warhol majority: transformation of purpose and function matters. And so it seems natural that SokolskyFilm cited Warhol on the first fair use factor (Purpose and Character of the Use).
But SokolskyFilm also contradicts Warhol because it bases its fair use conclusion almost entirely on the difference, newness, and independence of the message, which we just saw the Warhol majority saying was not enough.
What is strange is that SokolskyFilm, does not cite Warhol outside consideration of the first factor. Yet, in a curious way, SokolskyFilm combines elements of Justice Gorsuch’s Warhol concurrence and Justice Kagan’s dissent, while seemingly not impressed enough with actual Warhol majority analysis to follow it even in consideration of the first factor.
Justice Kagan’s dissent in Warhol argued for a broader conception of fair use, one that emphasized aesthetic transformation. Kagan argued that the majority’s focus on commercial purpose was too narrow. As she wrote, the majority’s approach threatened to “eliminate” fair use protection for works that are “aesthetically significant” transformations, even when they share a commercial function with the original. Kagan worried that this would constrain artistic freedom. She emphasized that changes in how a work is presented and perceived (its visual and aesthetic distinctiveness) should weigh heavily in the transformative use analysis, even without changes to the work’s commercial function or market purpose. SokolskyFilm, in a curious way, embodies Kagan’s vision. By holding that surrounding context can transform a photograph, rendering it “insubstantial” despite its full reproduction, one could say that SokolskyFilm effectively adopted an approach closer to Kagan’s dissent: the perception and presentation of the work, altered by context, is transformation enough.
Justice Gorsuch’s concurrence in Warhol offered yet another angle. Rather than focusing primarily on commercial purpose or aesthetic transformation, Gorsuch emphasized the nature of the challenged use itself. Gorsuch suggested that courts should examine whether the secondary use involves the same kind of creative act as the original. In other words, whether the defendant is engaging in the same type of creative activity as the copyright holder. This inquiry looks less to the market function and more to the type of use: Are you making art? Are you engaged in commentary or criticism? Or are you simply reproducing for the same creative purpose? SokolskyFilm, arguably, also aligns closely with this Gorsuch framework because Messiah was engaging in a different type of creative use (styling advice, fashion commentary) than Sokolsky’s original use (art photography showcase), even though the photograph itself remained unchanged.
This creates a fascinating tension: SokolskyFilm goes in a direction that the majority, in Warhol, seemed to have rejected, aligns with the deeper concerns of both Kagan’s dissent and Gorsuch’s concurrence, and then, ultimately, contradicts even those non-majority opinions. The Supreme Court majority said, in essence, look to purpose and market function. Justice Kagan said look to aesthetic transformation. And Justice Gorsuch said, look to the nature of the use. SokolskyFilm seems to have adopted elements of all three frameworks, but weighted them differently than the Supreme Court majority preferred, and even differently than Gorsuch and Kagan did.
These are not harmonious principles and not really the same inquiry, or the same expected answers. Though SokolskyFilm seems to champion the same protect-the-second-artist-to-promote-creativity sensibility as Justice Kagan’s dissent, Messiah’s blog in the end did not transform the work aesthetically, as the photo was unmodified in any way. Likewise, SokolskyFilm seemed, like the Gorsuch concurrence, to understand the first factor inquiry to concern the “use” rather than the “work.” But SokolskyFilm gives that use difference dispositive impact, while the Gorsuch concurrence noted that such “a comparative modest inquiry” concerning use is not determinative, as “no factor may ‘be treated in solution, one from another’” and the court was in this context neither deciding on infringement nor fully addressing all four fair use factors. Id. at 1290-91 (Gorsuch, J., concurring).
SokolskyFilm thus creates an approach and result that, if upheld and followed, could change the fair use landscape significantly, as it goes past the points debated by the majority, concurring, and dissenting opinions in Warhol. Doing so produces real differences in who wins and who loses these cases.
As just noted, this decision will create winners and losers. But they will be different set of winners and losers than Warhol created.
It seems like there are three groups of winners:
Conversely, there also seem like three groups of losers:
SokolskyFilm found that Messiah’s use of the “unaltered Parker Train Photo” was “rendered insubstantial in context” because “the Parker Train Photo … is accompanied by a question-and-answer completely independent of the Photo.” Id. at 10. Thus, for that court, we had fair use and no infringement. But what of the converse, where the juxtaposition of the unaltered original work with the new work creates the new work’s message through context? Is that an infringement even though the new work embodies and contains no portion of the original work?
That is not idle pseudo-philosophical issue-spotting or heuristics.
It is a real-world controversy, or at least was. “When Kristen Visbel’s ‘Fearless Girl’ was installed at Bowling Green in Manhattan’s Financial District in March of 2017…in the path of Wall Street’s famous ‘Charging Bull,’… Arturo di Modica, sculptor of ‘Charging Bull,’ sa[id] that ‘Fearless Girl’ [] violated his trademark, copyright, and moral rights.” Price, Charging Bull and Fearless Girl: Conflict between Artists’ Rights and First Amendment Freedoms, Case Disclosed, Yale Law School (June 18, 2018). According to di Modica:
The statue of the young girl becomes the ‘Fearless Girl’ only because of the ‘Charging Bull’: the work is incomplete without Mr. Di Modica’s Charging Bull, and as such it constitutes a derivative work of the Charging Bull…
Clearly, a deliberate choice was made to exploit and to appropriate the Charging Bull through the placement of the Fearless Girl.
[Siegel et al., Letter To Mayor DeBlasio On Charging Bull vs. Fearless Girl, April 11, 2017]
As one commentator noted, di Modica’s claim was that “the presence of Fearless Girl near Charging Bull recasts, transforms, or adapts his sculpture in two ways: by transforming the compositional environment in which the bull is displayed; or by recasting the symbolic importance of the sculpture.” One has to notice that exactly what SokolskyFilm found to be the basis of the fair use defense (contextual transformation) was what di Modica claimed to be the basis of his copyright infringement claim. Things can get really confusing here.
Here’s what troubling about SokolskyFilm, and why it’s worth a closer read: the decision appears to allow copyright holders’ works to be reproduced in their entirety, without modification, and without permission, provided sufficient distinguishing context is added. This is a meaningful expansion of fair use doctrine, particularly for visual works. It privileges context and commentary over the copyright holder’s original right to control reproduction and distribution.
Fair use exists precisely to balance the interests of copyright holders against the interests of the public in accessing and building upon creative works. Context, commentary, and new uses can generate value and promote the progress of science and the useful arts—the constitutional purpose of copyright. But SokolskyFilm tips the balance in a way that Warhol seemed to suggest the Supreme Court wanted to resist.
Several questions remain unanswered, and they will likely define how SokolskyFilm is applied and distinguished in future cases:
First, how much surrounding context is “enough” context? The SokolskyFilm court found that a question-and-answer format and styling tips sufficed. But what if Messiah had simply posted the photograph with a one-sentence caption? Would that be transformation? At what point does context become substantial enough to overcome the third factor?
Second, does the rule apply differently to different media? For photographs, context seems to matter more than for text or music. A 300-page novel cannot be rendered “insubstantial” by surrounding commentary in the same way a photograph can. Does this create a two-tiered fair use regime?
Third, what if the original photographer intended for the work to be recontextualized? Sokolsky’s work appeared in a book called Seeing Fashion, which was meant to showcase his photography. If the photographer or copyright holder had anticipated and approved of subsequent uses with new commentary, does that inform the fair use analysis?
Finally, does SokolskyFilm survive appellate scrutiny? The decision is a district court decision that has been appealed to the Ninth Circuit, with opening briefing due in October 2026. How will the Ninth Circuit, or maybe later the Supreme Court, treat the application of the third factor? Or has SokolskyFilm shifted the baseline for how courts analyze fair use in visual-media cases?
As Paul Simon sang in KodaChrome, “I can read the writing on the wall.”
The risk of SokolskyFilm, it seems, is that courts may take liberties with photographers’ intentions for their own work, and photographers may see challenges to their desire to control how their art used, and by whom, and in what context. The decision does not explicitly overrule or reject Campbell or Warhol, nor could it as District Courts don’t generally do that to the Supreme Court.
But SokolskyFilm would, if followed, shift the focus of how the third factor operates in photograph cases. SokolskyFilm says, in effect: “A photograph can be reproduced in its entirety, without modification, and used for a different purpose, and still be fair use, provided the surrounding context is sufficiently transformative.” For photographers (and for artists generally), that is a significant loss. For digital media platforms, content creators, and those who build on existing imagery, it is a significant gain.
Is that balance correct? Is it wise policy? Those are not questions this blog post can answer. But they are questions courts, and perhaps eventually the Supreme Court, will need to confront if SokolskyFilm reverberates through the fair use landscape. In the meantime, if you are a photographer whose work appears in a copyrighted compilation like Seeing Fashion, pay close attention to what gets republished, where it appears, and what context surrounds it. Under SokolskyFilm, context is everything.
And everything can be transformed by it.
June 8, 2026
Alert
In a continued development of patent eligibility policy following Ex parte Desjardins, the Patent Trial and Appeal Board (PTAB) reversed a subject-matter eligibility rejection under 35 U.S.C. § 101 for a Microsoft invention directed to AI-assisted code-editing tools, such as GitHub Copilot. Here, in Ex parte Ziegler, Appeal No. 2025-003643, decided May 29, 2026, the Board reversed the eligibility rejection in a 2-1 split decision, highlighting distinct perspectives on what constitutes an eligible claim to inventions in AI. In this decision, the specification made the difference.
Microsoft’s claims were directed to a system for improving code predictions in a programming editor in application No. 17/740,164 filed May 9, 2022. Rather than limiting input to code before the cursor as conventional code language models might, the claimed system assembles “additional context” from text after the cursor, open editor tabs, related code files, and metadata. Further, it specifies constructing a prompt by identifying a tree structure from that context before feeding it to the code language model. The Examiner rejected the claimed system under §101 as covering steps performable in the human mind, and the Board reversed with Administrative Patent Judge Jeffrey S. Smith writing for the majority and Administrative Patent Judge Sharon Fenick dissenting.
Judge Smith found that the specification sufficiently described limitations of prior art code editors and explained how the claimed invention overcomes those limitations by leveraging additional technical context to improve predictions displayed to the programmer. The majority opinion concluded that the specification “provides sufficient details such that one of ordinary skill in the art would recognize the claimed invention as providing an improvement” to code editor technology, and then verified that the claim itself “reflects the disclosed improvement” through specific technical steps including tree structure identification, sibling relationships, and object rearrangement, rather than merely invoking a generic machine learning model in a code editing environment.
Judge Fenick applied Recentive Analytics, Inc. v. Fox Corp., 134 F.4th 1205 (Fed. Cir. 2025), characterizing the claims as merely applying “machine learning to code editing using assertedly new input.” Judge Fenick also cited non-precedential Rensselaer Polytechnic Inst. v. Amazon.com, Inc. (Fed. Cir. 2026) for the proposition that “[g]eneric use of AI without other parameters, such as improving the mathematical algorithm or making machine learning better, is abstract.” The dissent read Microsoft’s arguments that using “additional context” as input constitutes an improvement to code language modeling as “an admission that no improvement to the machine learning model is claimed,” and merely “the use of a different source of input data to a generic code language model.” Accordingly, Judge Fenick would have sustained the rejection, finding that the asserted improvement does not integrate the abstract idea into a practical application.
The majority opinion establishes that improving the technology the machine learning model serves, in this case, code editors, is sufficient to integrate the abstract idea into a practical application, while the dissent takes the position that unless the claims improve the machine learning model itself, they fail under Recentive. This split reflects a broader framework emerging across the PTAB following the precedential Desjardins decision in Appeal 2024-000567 decided September 26, 2025, where claims reflecting “an improvement to how the machine learning model itself operates” may be found eligible, while claims that “do no more than claim the application of generic machine learning to new data environments” are not.
The present decision in Ziegler places Microsoft’s claimed system for generative code editing at the exact boundary between these two positions. When the asserted improvement to how a claimed machine learning model operates concerns the particular application of machine learning inputs in a relatively new data environment, the majority finds eligibility provided the specification sufficiently supports the improvement, while the dissent remains critical of claims that do not improve the mathematical algorithm or make the machine learning model itself better.
1: Prior art limitations in the specification
The majority opinion faulted the Examiner for failing to address why “the specification’s disclosure of using additional context to overcome limitations of prior art code editors does not describe an improvement in the technological field of code editors.” The specification identifies prior art limitations to precursor text, explains how those limitations reduced prediction usefulness, and describes the claimed structure as the solution. This may have provided critical foundation for the majority finding a technological improvement.
2: How the model operates on context
The dissent argued that the claims merely change “what is used as input to the code language model.” The majority opinion determined that the claimed system overcame this characterization because the claim further specifies how the system structures context, including tree identification, sibling analysis, and object rearrangement, rather than reciting only what data enters the model.
3: Technological improvement vs. business outcome
The majority opinion framed the improvement as one to “code editing technology” rather than a generic invocation of hardware applied to an abstract process. This distinction reflects the Desjardins framework, where the claimed improvement must be technological in nature, and a claimed improvement describable only by reference to a business benefit rather than a technical advancement may fall on the Recentive side of the divide.
The Recentive and Desjardins divide will define patent examination at the U.S. Patent and Trademark Office and prosecution strategy for the foreseeable future. In view of Ziegler and other proceedings since Desjardins, there are clear strategic advantages in (1) drafting specifications that articulate the technical shortcomings of existing systems and describe the claimed invention as the solution to those shortcomings, (2) reciting in the claims how the system structures and processes context rather than merely reciting new input data to a generic model, and (3) framing the claimed improvement as a technological advancement in the relevant field rather than a business outcome.
Jessica Bell, Kalus Kenny Intelex, Melbourne, Australia
From fresh market insights to proposed regulatory reform and a new AI tool, IP Australia is signalling an important period of change for intellectual property (IP) in Australia. IP Australia has recently released its Australian IP Report 2026, which provides valuable insight into current trends and developments in the IP landscape. A new public consultation also reflects the agency’s intent to streamline and simplify its regulatory processes. In addition, IP Australia is piloting a new AI-powered chatbot to improve access to IP-related information and assist users to better understand their options, whether defending an infringement claim or protecting their own IP rights.
Australian IP Report 2026
IP Australia released its 2026 Australian IP Report on 6 May 2026 (Report), collating the latest statistics on the use and regulation of IP rights in Australia and comparing domestic activity against broader international IP and economic trends. Of particular note, trade mark applications reached a record high in 2025, rising 13.3% from 2024 to 97,345. Similarly, trade mark registrations increased by 5.4% to 70,614.
According to IP Australia, trends in applicant origins, filing routes, and nominated goods and services classes reflect an increasingly dynamic and competitive brand landscape. Australian resident trade mark applications alone increased by 15.1%, exceeding non-resident filings and surpassing the previous domestic filings peak recorded in 2021, which suggests that brand development and protection remain a significant commercial priority for local businesses, with IP continuing to be leveraged as an important strategic asset.
IP simplified and streamlined?
In response to the Australian Government’s broader productivity agenda, IP Australia has also published a series of proposed reforms aimed at simplifying and streamlining most dealings with the agency. The proposals are intended to improve the efficiency of IP Australia’s regulatory and administrative processes, with a view to delivering services more effectively.
The Consultation paper was released in March 2026 and submissions for proposals closed on 2 April 2026. IP Australia is now considering the feedback received through the consultation process and is expected to provide formal advice to the Government on proposed reforms in due course.
Some of the proposed reforms relating to trade marks include:
· a proposal to introduce a more structured examination report response system. This would involve imposing a set timeframe for applicants to respond to each examination report, together with a limit on the number of responses permitted before rejection procedures commence. While IP Australia has not proposed a definitive timeframe, it used a two-month response period as an example and sought stakeholder feedback on both the appropriate timeframe and the number of responses that should be allowed. The proposal is intended to replace the current single long-form deadline system with shorter, response-based deadlines;
· a proposal to empower IP Australia to finalise trade mark opposition proceedings where both parties have effectively abandoned the matter and are no longer actively participating. The reform is intended to reduce administrative backlog and prevent opposition proceedings from remaining unresolved indefinitely; and
· a proposal permitting the correction of ownership errors made at the time of filing a trade mark application in certain defined circumstances. While limited corrections are already possible, for example, where a non-legal entity has been named as the owner, there is currently no clear mechanism for addressing situations where the incorrect legal entity within a corporate group was identified as the applicant. The proposal seeks to avoid the undesirable consequences of such errors, including exposure to opposition or cancellation proceedings and the continued registration of potentially unenforceable trade marks.
The Consultation Paper also identifies a number of broader policy issues on which IP Australia has not yet proposed a preferred course of action, instead seeking stakeholder feedback before providing formal advice to Government.
Not all of the proposed reforms have been received without criticism. For example, both the Intellectual Property Committee of the Law Council of Australia and the Queensland Law Society have raised concerned regarding the proposed examination report response system. In particular, it has been suggested that rigid timeframes and response limits could be prejudicial to parties in circumstances where new substantive issues are raised later in the examination process. Concerns have also been expressed that a more prescriptive framework may reduce the flexibility currently available to accommodate for differing circumstances and complexities issues arising across different applications.
IP Australia’s New First Responder
IP Australia is also piloting a new AI-powered chatbot known as ‘IP First Response’. The tool is intended to facilitate easier access to information relating to suspected IP infringement, responding to allegations of infringement, and the Australian IP system more generally. As at May 2026, IP First Response remains in a beta stage.
The platform can currently be accessed through a “Navigator” function, which guides users through a predetermined list of common issues, or through a chatbot interface.
IP Australia has emphasised that the platform is a tool only and is not intended to operate as a substitute for professional legal advice. Rather, it is designed as an educational tool and informational resource, providing users with preliminary guidance and outlining potential options before they determine the most appropriate course of action.
IP Australia’s First Nations Strategy
It has now been one year since the release of IP Australia’s First Nations Strategy for 2025-2030 (Strategy). The Strategy sets out a framework for administering Australia’s IP system in a manner that is more accessible and responsive to Aboriginal and Torres Strait Islander peoples, including through improved recognition and protection of Indigenous Knowledge.
Responsibility for implementation and governance of the Strategy sits with IP Australia’s executive board and includes commitments directed towards:
· delivering IP Australia’s services in a culturally informed and accessible manner;
· supporting Indigenous entrepreneurship and education so that Aboriginal and Torres Strait Islander peoples are better equipped to use the IP system to protect and commercialise their innovations;
· collaborating with Aboriginal and Torres Strait Islander peoples in decision-making processes affecting them; and
· implementing broader systemic and structural reforms within IP Australia to improve accountability and better respond to the needs of Aboriginal and Torres Strait Islander communities.
One year on, the practical implementation of the Strategy continues to evolve, with further developments likely to emerge over the coming years as these commitments are progressively embedded into IP Australia’s operations and policy framework.
The EU Court’s Nifty Legal Kraftwerk In Finally Defining “Pastiche”:
…And What That Could Mean on Both Sides of the Atlantic & the Galaxy
By James P. Flynn, Epstein Becker Green
In the beginning (defined as 1977), there was a two-second rhythm loop. Kraftwerk, the Düsseldorf electronic music pioneers whose synthesizer-driven soundscapes helped define an era, laid down a percussion riff in their track Metall auf Metall that would prove as durable as the metal referenced in the track title (Listen to the drum sequence that begins roughly at the 0:03 – 0:05 mark of the 1977 album version). Twenty years later, hip-hop producer Moses Pelham lifted that two-second loop, modified it ever so slightly, and played it as a continuous backbone beneath Sabrina Setlur’s 1997 rap track Nur mir. And with that, one of the longest-running copyright disputes in the history of intellectual property law was launched, a sort of legal Metall auf Metall loop of its own that has been repeating, with variations, ever since.
The Theory of Dilution Crosses the Pond
By Gregory J. Krabacher, Epstein Becker Green.
The origin story for the cause of action of “dilution” in the United States begins with Frank Schechter’s 1927 Harvard Law Review article, Rational Basis of Trademark Protection. [i] Indeed the U.S. Supreme Court credits Mr. Schechter’s work as the “seminal discussion,” noting that “[u]nlike traditional infringement law, the prohibitions against trademark dilution are not the product of common-law development, and are not motivated by an interest in protecting consumers.”[ii]
Mr. Schechter based his theories, among other cases, on his study of the German Odol case.[iii] In that case, the court found harm to the selling power of a well-known brand for mouthwash through the use by another party for steel. Schechter notes in passing that if U.S. courts eventually adopt Odol’s holding, “it will not be the first time that they have gone to continental armories for the weapons with which to combat the commercial buccaneer.”[iv]
A belief that traditional U.S. trademark law principles and “orthodox definition[s]” require updating to better address the practical realities and complexities of modern commerce appears to explain Mr. Schechter’s interest in Odol and similar cases.[v] According to Mr. Schechter, the “vital” distinction between the simpler commerce of say, 400 years ago, and “now” is that trademarks no longer merely designate “the origin or ownership of the goods to which it is affixed”, but rather, designate that goods “bearing the same mark[] emanate from a single source.”[vi]
Moreover, in this modern age, “the trademark is not merely the symbol of good will but often the most effective agent for the creation of good will, imprinting upon the public mind an anonymous and impersonal guaranty of satisfaction, creating a desire for further satisfactions. The mark actually sells the goods. And, self-evidently, the more distinctive the mark, the more effective is its selling power.”[vii] Such distinctive marks, says Schechter, deserve protection from the “subtle and refined” “trademark pirates” of the modern age who “proceed circumspectly, by suggestion and approximation, rather than by direct and exact duplication of their victims’ wares and marks.”[viii]
And so, the rationale proceeds, the law must protect such distinctive marks even in cases where the goods of the parties do not compete and there is no diversion of sales. For example, in cases such as Kodak (cameras and bicycles), Aunt Jemima’s (pancake flour and syrup), Vogue (fashion magazines and hats), Rolls-Royce (automobiles and radio parts) and Beech-Nut (food products and cigarettes), Mr. Schechter postulates:
The real injury in all such cases can only be gauged in the light of what has been said concerning the function of a trademark. It is the gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name by its use upon non-competing goods. The more distinctive or unique the mark, the deeper is its impress upon the public consciousness, and the greater its need for protection against vitiation or dissociation from the particular product in connection with which it has been used.[ix]
It would take time, but Frank Schechter’s ideas would spread, both geographically and substantively. Some 20 years after the article, Massachusetts enacted the first state statute protecting trademarks from dilution.[x] As noted by the U.S. Supreme Court, this state statute went beyond Odol’s sole concern for the harm to selling power (what Schechter referred to as “whittling away” and what we today refer to as “blurring”), but also included “injury to business reputation”, i.e. “tarnishment.”[xi] Following in Massachusetts’s footsteps, at least 25 States passed similar laws in the decades before the Federal Trademark Dilution Action (FTDA) was enacted in 1995.[xii]
Before examining the 1995 FTDA and its successor, the 2005 Federal Dilution Revision Act (FDRA), we pause to observe, as does Professor McCarthy, that the U.S. protection of brand distinctiveness diverges in at least one key respect from similar European laws. European Union law explicitly prohibits both dilution and free-riding, while federal U.S. anti-dilution law solely prohibits the likelihood of dilutive injury.[xiii]
The difference between the two is that free-riding is shown by mere association between two marks.[xiv] Dilution, on the other hand, requires association that further impairs the distinctiveness (blurring) or harms the reputation (tarnishment) of the famous mark.[xv] Therefore, and as discussed below, when U.S. courts find a likelihood of dilution based on a finding of association, alone, they err by ignoring the statutory requirement of impairment/harm and are essentially adopting the European standard for free-riding.[xvi]
Moseleying Along to a Federal Standard
Moseley Act One: A New Hope for Smut
The first U.S. federal dilution statute enacted in 1995 (which, again, was known as FTDA), defined the term “dilution” (the statute didn’t separate out blurring from tarnishment) as “the lessening of the capacity of a famous mark to identify and distinguish goods or services.”[xvii]
In its review of the FTDA, the U.S. Supreme Court in Moseley v. V Secret Catalogue, Inc., focused on the particular text found in 15 U.S.C. § 1125(c)(1)—“causes dilution of the distinctive quality” of the famous mark—to unambiguously require a showing of actual dilution, rather than a likelihood of dilution.[xviii] Although actual dilution was required, the Court clarified that the standard for injunctive relief under the FTDA did not require, as the Fourth Circuit had found in the Ringling Bros. case, proof of the consequences of dilution such as actual loss of sales or profits.[xix] So actual (not a mere likelihood) of dilution must be shown but not necessarily proof of financial harm. Does association establish the necessary showing?
This is where it gets interesting for our consideration of harm. The Supreme Court proceeded to point out the distinction between mere association and the further showing necessary for actionable dilution.[xx] And it did so in some depth:
As the facts of [the Ringling Bros] case demonstrate, such mental association will not necessarily reduce the capacity of the famous mark to identify the goods of its owner, the statutory requirement for dilution under the FTDA. For even though Utah drivers may be reminded of the circus when they see a license plate referring to the “greatest snow on earth,” it by no means follows that they will associate “the greatest show on earth” with skiing or snow sports, or associate it less strongly or exclusively with the circus. “Blurring” is not a necessary consequence of mental association. (Nor, for that matter, is “tarnishing.”)[xxi]
Applying this standard on the record before it, the Supreme Court noted that while there was evidence of association, there was no evidence of tarnishment caused by this association:
The record in this case establishes that an army officer who saw the advertisement of the opening of a store named “Victor’s Secret” did make the mental association with “Victoria’s Secret,” but it also shows that he did not therefore form any different impression of the store that his wife and daughter had patronized. There is a complete absence of evidence of any lessening of the capacity of the VICTORIA’S SECRET mark to identify and distinguish goods or services sold in Victoria’s Secret stores or advertised in its catalogs. The officer was offended by the ad, but it did not change his conception of Victoria’s Secret. His offense was directed entirely at petitioners, not at respondents. Moreover, the expert retained by respondents had nothing to say about the impact of petitioners’ name on the strength of respondents’ mark.[xxii]
Mosely Act 2: Congress Strikes Back
Following the Supreme Court’s decision in Moseley, Congress amended the Laham Act again with the 2006 Trademark Dilution Revision Act (TDRA) to further revise the dilution standard. Among other changes, the 2006 TDRA now says “likely to cause dilution by blurring or dilution by tarnishment of the famous mark” in place of the 1995 FTDA’s phrase “causes dilution of the distinctive quality.”[xxiii]
The current statute defines these two forms of dilution as follows, both of which include an element beyond mere association by further requiring either that such association impairs or harms the famous mark:
(B) For purposes of paragraph (1), “dilution by blurring” is association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. [setting forth six statutory factors]***
(C) For purposes of paragraph (1), “dilution by tarnishment” is association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark. [no statutory factors].[xxiv]
So, following the FTDA’s amendments, the text appears to require a proponent of a dilution claim to show there is a likelihood of two elements: (1) association between the famous mark and the junior mark and (2) impairment/harm caused by the association.
Mosely Act 3: Return of the European Free-Riding Standard for Dilution
The Sixth Circuit, in a later appeal in the same Moseley case, interpreted the new law in view of its legislative history, noting Congress’s intention to lessen the burden on proponents, noting:
The House Judiciary Committee Report states the purpose of the new 2006 legislation as follows:
The Moseley standard creates an undue burden for trademark holders who contest diluting uses and should be revised.
….
The new language in the legislation [provides] … specifically that the standard for proving a dilution claim is “likelihood of dilution” and that both dilution by blurring and dilution by tarnishment are actionable.[xxv]
From this legislative history, the Sixth Circuit made an inference. Not only did Congress mean to reduce the burden of proof from “actual” to “likelihood” but, per the Court, it actually intended to remove plaintiff’s burden of going forward in certain cases by presuming harm to reputation upon a showing of likelihood of association alone. As stated by the Court of Appeals: “In the new law Congress rejected the Court’s view that a simple ‘likelihood’ of an association in the consumer’s mind of the Victoria’s Secret mark with the sexually-oriented videos and toys of “Victor’s Secret” is insufficient for liability.[xxvi]
The Court of Appeals went still further. Logically, if a “likelihood of tarnishment” can be presumed upon a showing of association in connection with certain products, then, the Court reasoned, this implies more than a lessoning (nay elimination) of Plaintiff’s burden. It implies a reversal of the burden from the party asserting a dilution claim to the party defending it. The Court reasoned:
The burden-of-proof problem, the developing case law, and the Restatement (Third) of Trademarks in § 25 (particularly subsection g) should now be interpreted, we think, to create a kind of rebuttable presumption, or at least a very strong inference, that a new mark used to sell sex-related products is likely to tarnish a famous mark if there is a clear semantic association between the two. This res ipsa loquitur—like effect is not conclusive but places on the owner of the new mark the burden of coming forward with evidence that there is no likelihood or probability of tarnishment. The evidence could be in the form of expert testimony or surveys or polls or customer testimony.[xxvii]
Some have observed that the Sixth Circuit’s standard in Moseley appears to be in tension with how other Courts of Appeal have interpreted the TDRA. As noted by Circuit Judge Karen Nelson Moore, in her dissent of the Sixth Circuit’s Mosely decision:
As the Second Circuit recently noted in Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97 (2d Cir.2009):
That a consumer may associate a negative-sounding junior mark with a famous mark says little of whether the consumer views the junior mark as harming the reputation of the famous mark. The more relevant question, for purposes of tarnishment, would have been how a hypothetical coffee [with a negative-sounding name] would affect the positive impressions about the coffee sold by Starbucks.
***In fact, when reviewing the exact same evidentiary record, the Supreme Court explicitly noted that Victoria’s Secret’s offer of proof included no evidence that “Victor’s Little Secret” affected Baker’s positive impressions of Victoria’s Secret…[xxviii]
While there are plenty of notable commentators who strongly disagree with Mosely for a variety of reasons[xxix] and while the pace of adoption of the Sixth Circuit’s burden shifting standard has not been especially brisk nation-wide in the twenty years since it was decided, the decision remains the law of the land within the Sixth Circuit.[xxx] Moreover, and perhaps somewhat surprisingly to some, no reported decision appears to outright criticize the holding.
What’s a Brand to Do?
Outside of the Sixth Circuit, and for cases involving products unrelated to sex, owners of famous brands may feel it is a little risky to rely on the Mosely presumption and burden shifting. Even for a case on all fours within the Circuit, parties may be looking to bolster their claims with support of likelihood of tarnishment beyond mere association by also demonstrating a likelihood of harm to reputation caused by the association.
Why, you may ask? While it may seem “self-evident” to some that harm to the reputation of a mark would necessarily flow from its association with sex-related products, the U.S. Supreme Court, as noted above, did not find it so obvious. Moreover, those who have studied the question have struggled to find real world evidence of the “obvious” harm caused. Indeed, to the extent the association causes a change in consumer perception of a brand, it may just as easily point the other way. For example, in one recent study carried out by Jake Linford et. al., the investigators report the following:
Our studies produced surprising results, many of which may prove useful to scholars, litigants, courts, and policy makers examining the tarnishment doctrine. In both studies, and contrary to the underpinnings of the tarnishment doctrine, associating well-known marketplace brands with sex- and drug-related messaging produced not a tarnishment effect, but a small yet reliable burnishment effect. Our participants meaningfully and statistically preferred our target brands more when they were exposed to tarnishing stimuli than when they were not. Moreover, exposure to the test stimuli images counterintuitively led participants to perceive those brands as stronger, which influenced their preference for the brands in the tarnishment condition.[xxxi]
So, if a brand owner is not content to rest on association alone in a tarnishment case, and expensive surveys carry their own risks of backfiring, what options do they have? A recent decision in another famous dilution case may suggest a relatively safer and cost-effective option. There, the proponent seemed to follow a middle way – providing at least some basis to support a showing of harm without resorting to an expensive survey.
The case to which I refer is the latest decision in the saga that is the “Bad Spaniels” litigation between VIP Products and Jack Daniel’s. As factual set up, Justice Kagan, on this case’s recent trip up to the Supreme Court, succinctly quipped: “This case is about dog toys and whiskey, two items seldom appearing in the same sentence.”[xxxii]
Our interest here in the case is the method by which Jack Daniel’s supported its claim of tarnishmet with evidence of a likelihood of harm to reputation. It did so by using an expert but not for the usual purpose of conducting an expensive survey. Instead, Jack Daniels’ expert based his opinion on general literature and a methodology with a fancy title: “The Associative Network Model (“ANM”)”, which the District Court found “has been empirically tested and verified numerous times since the 1970’s.”[xxxiii] No survey questions or participant selection to attack. Just some “reliable” studies interpreted by a reliable guy to explain why associating dog poop with a food product is likely to trigger disgust in the minds of the consumer and thereby harm the reputation of the food product.
VIP attempted to challenge the expert’s report as “insufficient to show tarnishment because it merely amounts to Dr. Simonson’s subjective impression of the tarnishing effect of “Bad Spaniels.”[xxxiv] Furthermore, VIP argued that the expert’s conclusions are unsupported because he conducted no surveys or focus groups and failed to account for the fact that “Bad Spaniels” is a parody product.[xxxv]
This Court was having none of it, explaining:
VIP misconstrues and misstates the testimony provided by Dr. Simonson. In reaching his conclusions, Dr. Simonson evaluated consumer psychology research showing that the association of food of beverage with defecation generates disgust in the mind of the consumer. Based on well-documented research suggesting that such feces-related associations lead to negative consumer associations with food and drink products, Dr. Simonson concluded that “Bad Spaniels” was likely to create negative associations of Jack Daniel’s whiskey with feces and thereby undermine the positive associations that Jack Daniel’s has created with respect to its whiskey. (Doc. 234 at 172–74, 200). In weighing the testimony and evidence supplied by the parties’ experts, the Court has credited and given prevailing weight to Dr. Simonson’s conclusion that “Bad Spaniels” is likely to tarnish Jack Daniel’s trademarks by creating negative associations of Jack Daniel’s products with dog feces.[xxxvi]
Therefore, on the strength of an admittedly impressive expert employing the impressive sounding “The Associative Network Model” by taking general literature and applying these papers to the particular facts of this case, the Court found “Jack Daniel’s has demonstrated by a preponderance of the evidence all of the elements necessary for a claim of dilution by tarnishment: fame, similarity, and reputational harm, caused by the association of VIP’s use of “Bad Spaniels” with Jack Daniel’s trademarks and trade dress.”[xxxvii] Easy enough.
The Challenge Not Yet Heard
We’ll wrap up this Note with one to watch. In the “Bad Spaniels” case, VIP attempted, and was refused the opportunity, to raise a First Amendment challenge to the tarnishment provision of the Lanham Act.[xxxviii] VIP’s argument was that “the Supreme Court’s recent decisions in Matal v. Tam, 582 U.S. 218 (2017) and Iancu v. Brunetti, 588 U.S. 388 (2019) compel the conclusion that the statute amounts to unconstitutional viewpoint discrimination by enjoining the use of a mark that “harms the reputation” of a famous mark.”[xxxix] While this argument was raised a bit too late to be heard in this case, its bound to come up again in tranishment cases in the future. Consider too that consumer sentiment is not stagnant. Most consumers have different views about topics like sex and drugs than they did when Frank first put pen to paper 99 years ago. As such, so the argument goes, there is great risk of overbreadth and stifling of free speech if, as did the Sixth Circuit in Mosely, courts merely rely upon a “growing consensus” at a particular point in time to create a per se rule that an entire category of speech (and one of unclear boundaries) necessarily harms a brand’s reputation.
Lawyers within the ILN Intellectual Property Specialty Group regularly advise clients on protecting and managing intellectual property rights across jurisdictions. Learn more about our global IP capabilities.
Related ILN IP Insider Articles:
As brands increasingly operate across markets and platforms, trademark protection and dilution issues remain highly relevant for clients doing business internationally.
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[i] Frank I. Schechter, The Rational Basis of Trademark Protection, 40 Harv. L. Rev. 813 (1927)
[ii] Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 429, 123 S. Ct. 1115, 1122, 155 L. Ed. 2d 1 (2003)
[iii] Schechter, supra note 1, at 831.
[iv] Id. at 832.
[v] See id. at 813–18 (1927)(quoting, among other sources, Hanover Star Milling Co. v. Metcalf, 240 U. S. 403, 412 (1916)).
[vi] Id. at 817.
[vii] Id. at 819.
[viii] Id. at 825.
[ix] Id.
[x] Moseley, 537 U.S. at 430 (citing 1947 Mass. Acts p. 300, ch. 307).
[xi] See id.
[xii] Id. (citing Restatement (Third) of Unfair Competition § 25, Statutory Note (1995).
[xiii] See § 24:68. Dilution: Free Riding Or Impairment Of Distinctiveness?, 3 McCarthy on Trademarks and Unfair Competition § 24:68 (5th ed.)
[xiv] Id.
[xv] See id; See also 15 U.S.C.A. § 1125(B)( defining of “dilution by blurring” and § 1125(C)(defining “dilution by tarnishment”).
[xvi] See McCarthy, note 13 supra, § 24:68 (citing criticism of such decisions).
[xvii] 15 U.S.C. § 1125(C)[1995]
[xviii] Moseley, 537 U.S. at 432–33.
[xix] Id. at 433 (overruling Ringling Bros.-Barnum & Bailey Combined Shows v. Utah Div. of Travel Dev., 170 F.3d 449, 460 (4th Cir. 1999).
[xx] Id. at 433–34.
[xxi] Id. (emphasis added).
[xxii] Id. at 434 (emphasis added).
[xxiii] Compare 15 U.S.C. § 1125(C)(1)[2006] to 15 U.S.C. § 1125(C))[1995]
[xxiv] 15 U.S.C.A. § 1125 (C)(1)(emphasis added).
[xxv] V Secret Catalogue, Inc. v. Moseley, 605 F.3d 382, 387 (6th Cir. 2010)(citing and quoting U.S. Code Cong. & Adm. News, 109th Cong.2d Sess.2006, Vol. 4, pp. 1091, 1092, 1097. Further noting: The drafters of the Committee Report also called special attention to the “burden” of proof or persuasion placed on “trademark holders” by the Supreme Court’s opinion in Moseley, suggesting a possible modification in the burden of proof.).
[xxvi] V Secret Catalogue, Inc., 605 F.3d at 387.
[xxvii] Id. at 388.
[xxviii] Id. at 392 (J. Nelson Moore, dissenting)(emphasis added)(quoting Starbucks Corp., 588 F.3d at 110); see also id. at 393 (“In short, Victoria’s Secret has presented no probative evidence that anyone is likely to think less of Victoria’s Secret as a result of “Victor’s Little Secret” and cannot therefore prevail on its claim of dilution by tarnishment”, citing Hormel Foods Corp. v. Jim Henson Prods., Inc., 73 F.3d 497, 507 (2d Cir.1996) (“Absent any showing that Henson’s use [of a puppet named Spa’am] will create negative associations with the SPAM mark, there [is] little likelihood of dilution.”).
[xxix] See, e.g, § 24:89. Dilution by tarnishment, 3 McCarthy on Trademarks and Unfair Competition § 24:89 (5th ed.)(“I agree with the position of Judge Karen Nelson Moore in her dissent. The majority’s creation of a presumption of dilution by tarnishment if there is use on “sex related products” is wildly misguided.”)
[xxx] V Secret Catalogue, Inc. v. Moseley, Rehearing and Rehearing En Banc Denied (Aug. 5, 2010); Moseley v. V Secret Catalogue, Inc., 562 U.S. 1179 (Jan 18, 2011)(denying certiorari).
[xxxi] Jake Linford et. al., Trademark Tarnishmyths, 55 Ariz. St. L.J. 609, 674 (2023)
[xxxii] Jack Daniel’s Props., Inc. v. VIP Prods. LLC, 599 U.S. 140, 144, 143 S. Ct. 1578, 1582, 216 L. Ed. 2d 161 (2023)
[xxxiii] VIP Prods. LLC v. Jack Daniel’s Props. Inc., No. CV-14-02057-PHX-SMM, 2025 WL 275909, at *6 (D. Ariz. Jan. 23, 2025)
[xxxiv] Id at *18.
[xxxv] Id.
[xxxvi] Id.
[xxxvii] Id. at *19.
[xxxviii] Id. at *12.
[xxxix] Id.
Companies outside traditional tech sectors may be sitting on IP goldmines without realizing it. Manufacturing, e-commerce, and consumer products businesses routinely use AI technologies from predictive maintenance to automated pricing. These technologies represent valuable intellectual property assets. While these companies may not self-identify as “tech companies” in the Silicon Valley sense, their AI implementations are every bit as technically sophisticated and legally protectable. (more…)
By Stavros Varveris, Trainee Lawyer at A. & K. METAXOPOULOS AND PARTNERS LAW FIRM, a member of the International Lawyers Network
Law No. 5271/2026 introduces a new specialized legal framework combining administrative and criminal regulation for the prevention and repression of art forgery, the protection of the physical integrity of works of art and collectible items, and the establishment of certified expert mechanisms for authentication.
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Authors: Ronald Urbach of Davis+Gilbert and Robert Chappell Jr. of Davis+Gilbert
The Bottom Line
Advertisers and marketers who target NYC consumers should take note: the appointment of former FTC Bureau of Consumer Protection Director Sam Levine as Commissioner of the NYC Department of Consumer and Worker Protection (DCWP), combined with Mayor Mamdani’s recent executive orders on consumer protection, signals a major shift in enforcement priorities. With former FTC Chair Lina Khan serving as a key mayoral adviser, businesses can expect the kind of robust, aggressive oversight of advertising and marketing practices not seen since the Mark Green era. This alert outlines what advertisers need to know and how to prepare.
History of the NYC Department of Consumer and Worker Protection (DCWP)
The DCWP, formerly the New York City Department of Consumer Affairs, was established in 1969 as the country’s first municipal consumer protection agency of its kind. Following the passage of the City’s consumer protection law, the department was created with broad authority to protect New Yorkers from deceptive business practices.
Under its broad authority, the DCWP oversees advertising that reaches NYC consumers — including national advertising. Along with the City’s Consumer Protection Law, the DCWP has undergone periods of heightened, aggressive enforcement against national advertisers believed to be non‑compliant with the City’s Administrative Code and the Rules of the City of New York. Further, in 1989, the Department of Consumer and Worker Protection set advertising guidelines for businesses requiring DCWP licenses. Examples of key areas of concern under the City’s advertising rules include pricing claims, offer terms, bait-and-switch tactics, free offers, and other false or misleading claims and illustrations.
New Leadership at the DCWP
Prior to the inauguration of Mayor Mamdani, it was announced that former Director of FTC’s Bureau of Consumer Protection Sam Levine would serve as the Commissioner of DCWP. During his time at the FTC, Levine oversaw enforcement, rulemaking, and policy work in many areas, including marketing, digital advertising, and consumer reporting.
While Levine served at the FTC, Lina Khan, co‑chair of Mayor Mamdani’s transition team, was the chair of the federal agency. Under the Khan‑era FTC and Levine’s leadership, the agency increased actions and rulemaking regarding issues concerning the advertising and marketing practices. Although Khan’s long-term role under the Mamdani administration remains unclear, Levine’s appointment signals a return to the DCWP’s aggressive oversight of business practices impacting New Yorkers — which includes national advertising and marketing practices.
The Mayor’s Recent Executive Orders
Mayor Mamdani’s two executive orders seeking to advance his affordability agenda, emphasizing pricing transparency, corporate accountability, and compliance with the City’s laws, are a recent indication of the administration’s intention to increase oversight and enforcement at the DCWP.
Strong Allies
At the signing of the two executive orders. Mayor Mamdani was joined by NY Attorney General Letitia James, City Council Speaker Julie Menin, and Commissioner of the DCWP, Sam Levine. We can expect that the NY City Council will ensure that the Mayor and Commissioner have sufficient resources to accomplish their consumer protection mission. Standing side by side, NY Attorney General James will support the consumer protection mission both by words and action.
Implications for National Advertisers and Marketers
While these executive orders concern junk fees and subscriptions, each largely mirrors initiatives of the Khan‑era FTC. The practical implications of such consumer protection monitoring and enforcement in New York City will likely play out for national advertisers and marketers. In the immediate term, with Mayor Mamdani in office and the appointment of Commissioner Levine, businesses should prepare for a potential return to robust, aggressive oversight by the DCWP of national advertising and marketing that reaches New Yorkers.
Drawing from the strong record of consumer protection at the FTC during Chair Khan and Bureau Director Levine’s tenure, we can look to that record for topics and issues to now be taken up by the newly revitalized NYC DCWP. Advertisers and agencies that take proactive steps now will be better positioned to avoid costly enforcement actions down the road.