May 1, 2012

Stealing From the Big Guys is Still Stealing

Filed under: Legal Issues — Meredith @ 11:02 am


Imagine you are at a craft show and you see a really cool screen printed tote with a design you recognize on it. It’s a design you know belongs to someone else. Would you buy from that exhibitor? Would you call them out for being a thief? What if the designer is George Lucas or Stan Lee and the tote depicts Darth Vader or Spiderman?

Is this different than what Paperchase famously did when they stole from independent artist Hidden Eloise? Is it okay to steal from Marvel or DC or Sanrio or Lucas Arts just because they’re bigger? Careful how you answer that. If you’re lucky one day you’re going to be big and someone’s going to want to steal your creations. Are you going to be as lax about it?

Here’s why stealing is stealing and it sucks no matter who you are stealing from.

1. It’s illegal
I don’t care if you think you’re protected by parody or free expression. If you are making something for profit/commercial purposes no judge is going to look favorably upon what you’re doing. The legal definition of parody is narrow and when you are clearly just using someone else’s creation to make a fast buck your chances in court aren’t good.

I find it disappointing that major intellectual property holders like Marvel and DC don’t more rigorously protect their property but that doesn’t mean they never do it. It doesn’t mean they won’t bust you and take everything you own. It’s not worth it. If you think you’ll fly under the radar because you’re small think again. Big and small intellectual property thieves get caught all the time.

2. You are ripping off other little guys
When you steal from companies like Lucas Art or Sanrio you’re not just hurting them. You’re hurting the people they license to and not all of their licensees are mega corps. While you’re ripping off intellectual property other people are paying to license and they now have to compete with you in the marketplace. Your cost of doing business is less because you’re not paying licensing fees and their cost of doing business is more because they are.

It’s also important to consider that licensing is an important revenue stream for companies like Marvel, DC, etc. and when you steal their creations you’re hurting the licensing part of their business. That licensing money is what allows those larger companies to hire people and create jobs.

3. You’re showing your own lack of creativity
If I see your craft fair booth or online store full of unlicensed Storm Trooper, Mickey Mouse and Hello Kitty designs, I will think you suck and have no creativity of your own. You’re not building a brand by trying to make a quick buck off of someone else’s brand. I don’t care if you put Darth Vader in a dress or put Mario and Luigi in a pizza parlor, these characters do not belong to you and regardless of what you do with them, you’re not creating something of your own. Slapping these characters on a t-shirt or tote or pendant without paying for licensing tells me you are lazy and don’t have ideas of your own.

So what about those who pay for licensing?
I really have no issue with this. If you are legitimately paying to license Angry Birds or Pikachu that’s fine. It’s a perfectly legal business model.

In those instances where something is being licensed one of a few things is going on.

A. The company’s business model is built around licensing stuff and their branding isn’t an important part of their business.

B. The company’s business model has nothing to do with the art they licensed and it’s just helping them sell their already established brand. (For example Zippo licensing from Harley Davidson. Their business is really lighters, not the designs on them.)

C. The company has licensed a collaboration deal that incorporates their established branding with another company’s established branding. (For example Johnny Cupcakes collaboration with Hello Kitty.)

Before you try to “get creative” with someone else’s characters, consider the legal ramifications and what it says about your ability to build a brand of your own. If you’re trying to figure out how you can make money by just designing characters of your own, stay tuned. I’ll be talking about that tomorrow.

Don’t forget, publicist Lauren Aseff is spilling her secrets about how to get your products into TV and movies. The deal is running this week ONLY, so don’t miss out.


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October 3, 2011

3 Reasons To Create Your Own Characters and Leave Other People’s IP Alone

I have some really strong feelings about intellectual property (IP) in the design world. On one hand, I think some people are too quick to claim they invented the wheel. On the other hand, it’s totally irritating to watch my competitors trying to make a quick buck off another artists’ creativity, when it’s a legitimate case of infringement.

Yesterday I stumbled across a crafty business who’d based their entire branding around very famous fictional trademarked characters. The characters were not old classics in the public domain like Alice in Wonderland’s crew, they’re characters created in the last 30 years by companies that are currently running their own businesses based on those creations. The designs couldn’t even be protected by parody, they were just blatant cases of infringement. Here’s why this is a bad idea:

1. It could ruin you financially
If you’re caught using someone else’s characters without licensing, you could be sued and you probably won’t win. Being on the wrong side of an IP lawsuit can cost you a fortune. You could be on the hook for your legal fees, the plaintiff’s legal fees and damages. These costs could ruin your business and your personal finances. If your plan is to fly below the radar and not get caught, think again. Anything can be found on the internet.

2. It limits your ability to license
Licensing can be big bucks for designers and illustrators. If you create you own world full of original characters, you can license your creations. The beauty of licensing your original creations is that all you have to do is iron out the licensing details and let the money come in. The licensee handles all of the product manufacturing and sales. This can be a terrific income stream for an artist. If your designs are based around other people’s characters, this option is off the table for you. You can’t license what isn’t yours in the first place.

3. It weakens your brand
Successful consumer brands often strengthen their branding with original characters. This is true of clothing companies (think Paul Frank and his monkey), fast food chains (who could forget Ronald McDonald and his friends?), Travelocity (think Roaming Gnome), etc. The list of brands that have benefited from creating original characters is endless.

When you base your all of creations on other company’s characters, it weakens your brand. At best you’re seen as a one in a million licensor of a famous brand’s creations. At worst you’re seen as an intellectual property thief with no original ideas.

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June 9, 2011

What Weinergate has in Common with Your IP Dalliances

Filed under: Legal Issues — Tags: , , , , , , — Meredith @ 9:04 am

The media is totally atwitter over the Anthony Weiner scandal. (In case you live under a rock in the US or overseas and don’t know about this, the short story is this: a US congressman was engaging in some cybersex with women online and sending tawdry photos of himself to these ladies. One of the photos got out and ever since, it’s been a media frenzy, with people calling for an end to his career.)

What does this have to do with your business?
I actually see a parallel between Weiner’s mistakes and the mistakes small business owners make with intellectual property (IP). Regular readers may remember that back in February I did a series of articles covering common issues with regard to intellectual property and creative entrepreneurs. I interviewed several legal experts and came away with two clear points:

1. IP law has some gray areas, some areas that aren’t intuitive and often the law doesn’t even matter, the people with the most money are usually the victors.

2. The easiest thing to do, when it comes to IP is keep your nose clean. Don’t instigate trouble if you don’t have to.

This is a lot like Anthony Weiner’s situation. He may or may not have broken the law, though signs right now point to no laws being broken. Whether he broke the law or not is beside the point. His embarrassing behavior is wreaking major havoc on his private and professional life. The same would be true if it came to light that you were doing something with someone else’s intellectual property that was deemed unsavory, either by the public or the IP rights owner.

So here’s my argument for taking stock of your current product offerings, and making double sure you’re not doing something that could land you in trouble:

1. There’s a good chance of getting caught eventually
Anthony Weiner probably thought no one would ever know he was messing around online. Similarly, if your plan to skirt IP law is that you won’t get caught, think again. When you put something online, either privately or on your website, there’s every chance the things you put out there will get seen by unintended audiences.

If your plan to sell bootleg Hello Kitty necklaces is something along the lines of “No one really knows about my little old Etsy shop”, think again. Nothing is safe from Googling eyes and if you’re doing something questionable, it will probably get noticed eventually.

2. Just because it’s “legal” doesn’t mean it’s not going to cause you legal headaches
The frustrating thing about our legal system, at least in the US, is that just because you haven’t broken a law, doesn’t mean people can’t make your life difficult. Even if it turns out Anthony Weiner has broken no laws, he’s already wasted so much time and energy on this nonsense. This is time and energy he could be spending on his job as a congressman.

Getting back to you, imagine you are technically on the right side of the law, at least in your opinion. Imagine you think what you’re doing is protected by parody or first sale doctrine. That won’t prevent an overzealous legal team from harassing you and taking you to court. Even if you could win, imagine the personal and financial toll fighting would entail. Imagine how time consuming a legal battle would be. Do you really want to waste your time, money and energy on that?

3. Just because you get away with it, it doesn’t make you less scummy
Let’s imagine the investigation against Anthony Weiner is not able to turn up any evidence of illegal activity. Will it make much of a difference for him? Legal wrong-doing aside, he’s paid a pretty hefty price in terms of his reputation and this could completely end his career. People are going to associate him with sending lewd photos to strangers for a long time to come.

If your business is publicly accused of trouncing someone else’s IP, you’re going to be associated with stealing someone else’s property, even if you are able to win a legal case over the issue. Winning in the court of public opinion can be more difficult and a bad reputation can ruin your business.

What about my rights as an artist?
I firmly believe that IP laws are too strict in the US and that people are overzealous about trying to enforce their IP rights. I think there’s plenty of IP bullying that goes on and I am all for free speech and free expression. All of that said, I’m also a business owner and advocate doing what’s profitable and causes you the fewest headaches. Testing the limits of IP law isn’t going to help on either of those counts.

Similarly, I actually don’t care that Anthony Weiner was engaging in cybersex. I think he has a right to a private life and I feel it’s none of my business. I don’t think his sexual proclivities have anything to do with his ability to do his job and I’d rather not hear about them. That said, I think it was a mistake of him to send out those lewd photos to strangers. Not because I think the act was wrong, but because I think the risk of getting caught was too high and the ensuing fall out makes it not worth whatever fun was had at the time.

Anthony Weiner’s fate isn’t dictated by this fairly progressive business blogger/voter who doesn’t live in his district, it’s dictated by general public opinion, the media and whatever dirt the investigative team can dig up on him. And the fate of your business, when it comes to toying with IP, isn’t controlled by me or you. It’s controlled by lawyers/judges, consumers and even how much money/time/energy you have to argue about it. If your goal is to keep your business profitable and avoid hassles, err on the side of conservative when it comes to these issues.


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February 25, 2011

Working With Upcycled Materials? You Could Be in Legal Jeopardy

Filed under: Legal Issues — Meredith @ 5:16 am

I asked attorneys to weigh in on the following questions. Today we have input from intellectual property attorney, Marc Misthal. Marc is affilaited with Gottlieb, Rackman & Reisman, an IP boutique law firm that specilaizes in art-related issues. We also have some input from intellectual property attorney Jeffrey H. Greger and Monica P. McCabe from Vandenberg & Feliu LLP.

To start us off, Jeffrey H. Greger writes “Trademarks are defined as indicators of source, sponsorship, or affiliation. The laws governing trademarks prevent unauthorized use of a trademark which may confuse or falsely affiliate an unauthorized use with a trademark owner. The laws are designed to protect the public but most trademark owners lose sight of that fact. Rights in trademark are based on the first one to use a distinctive mark and such rights can last in perpetuity provided the mark continues in use.

Copyright is a completely different limited-in-time right which protects works of creative authorship in tangible form. One of the easiest concepts is a sculptor who makes a creation out of a lump of clay. The resulting sculpture is protected against copying.”

1. A lot of artists out there do work with post-consumer materials, like magazines, soda cans, cereal boxes, etc. I have heard the first sale doctrine should protect their right to produce work like this, but I’ve also seen many artists get sued for trademark infringement for producing work like this. Does the artist have the right to make art from post-consumer materials or does a company like Budweiser have the right to sue her for making a necklace out of an empty can of Bud Light and selling it? I know in the past famous collage artist Barbara Kruger has been sued for making collages of copyrighted materials.

“To answer your question, you have to differentiate between one-of-a kind works and reproduced works. In the first category, if an artist or business takes consumer materials, e.g. cereal boxes, newspaper excerpts, jewelry or eyeglasses, and incorporates these actual items into a work of art, for example in a collage, and sells that art, in the usual situation this is not copyright infringement, because (under the first sale doctrine, as you mentioned), one who legitimately acquires copyrighted material can generally use it (but NOT reproduce it) in any manner.

However, in the second category, if the artist or business takes consumer materials, and reproduces them alone or in combination, that might be copyright or trademark infringement, on the basis that the company who made the consumer materials might have copyright or trademark protection. The defense here is the “fair use” defense, meaning generally there is an artistic or transformative purpose for the reproduction, and it does not compete directly with the interests of the original product producer. There is often not a black and white answer to whether the fair use defense applies in a given situation.”
- Marc Misthal

Interestingly, Jeffrey H. Greger and Monica P. McCabe disagree with this assessment…

“Trademark exhaustion allows one to re-sell a genuine product on Ebay for example. If one transforms the product into something else, the trademark owner has lost the ability to control its own product which is the core concept behind trademark law. The public learns to trust the trademark as affiliated with the genuine owner who provides a level of accustomed quality which is also referred to as the “good will” built in a brand. Trademark owners are required to control and review for quality all goods bearing the owner’s mark.

So, what is wrong with selling model airplanes cut out of some old Budweiser beer cans? Anheuser Busch, the owner of the distinctive Budweiser trademark and logos and designs (trade dress) would likely object to such use on the belief that consumers are likely to assume a false affiliation with Budweiser. If the transformed cans were sold near a Busch Gardens Theme Park I could see a real problem. I bought one on the beach from a guy selling all different cans turned into model planes and there is no way I thought Busch sponsored or was affiliated. Nevertheless, the transformed use provides Busch with at least the right to object and file a law suit and Anheuser Busch is pretty aggressive in that department.”
- Jeffrey H. Greger

“The first sale doctrine is a copyright concept which allows a purchaser of a tangible artistic work, like a book, to resell it without violating any copyright laws. It is important to note however that the first sale doctrine only allows for one sale of the work and does not confer the rights the copyright owner would have such as the right to reproduce, display or perform the work. In short, the first sale doctrine does not apply to adaptations of a work. Rebinding a paperback book into a hardcover would come under the first sale doctrine, but taking different things and creating a new compilation (such as a collage) is an infringement of the copyright owner’s adaptation rights. In fact, in one case the court held that taking pages of an art book and mounting it onto ceramic tile was considered infringement because it was a derivative work of the original owner’s work.

The doctrine of fair use may be of more help in certain situations. The doctrine allows certain types of uses of a copyrighted works without permission of the owner primarily for uses in the area of commentary, parody, news reporting, research and education. Courts usually do not find fair use where the use of the copyrighted work is for commercial purposes. There is a four factor test that the courts will weigh: (1) the purpose and character of the use, including whether the use is for nonprofit, educational purposes; (2) the nature of the copyrighted work – whether it is factual or more creative; (3) the amount and substantiality used in relation to the copyrighted work as a whole; and (4) the effect of the use on the potential market for or value of the copyrighted work – could the use be in competition with the copyright holders. So, for instance, if an artist donates a collage to a school that incorporates only a small portion of the copyrighted work, it likely would not take away a potential market that the copyright owner may have. Thus, the artist may successfully use the defense of fair use if the copyright owner were to complain or sue.

Artists also need to worry about trademark infringement, i.e, confusion by the public as to the source of origin of the artist’s work. It is possible that someone might think the artist’s work is somehow affiliated with Budweiser. Under trademark principles, only Budweiser or its authorized licensees may use its trademark or logo. Others may use the trademark or logo merely to identify the beer sold under the mark. While some companies may appreciate the publicity from the use of their trademark in an artistic design, others may object to a commercial use of the trademark in such a manner. The safest course would be to seek permission from the trademark and/or copyright owner(s).”
- Monica P. McCabe

2. If artists are protected by first sale doctrine, could a company still claim infringement for trademark dilution or trade dress and would their claim be legitimate?

“Among the most famous cases in this area are those that relate to the well-known artist, Jeff Koons. In one case, he was sued by a photographer who claimed that Koons obtained a picture of a couple holding a group of eight puppies in a postcard, and used that picture to create a large 3-dimensional sculpture with the same theme and layout. The Federal Court of Appeals in New York ruled that Koons was guilty of copyright infringement.

In another and later case, Koons took a portion of an advertisement showing a woman’s legs, changed them so that they were dangling downwardly, and incorporated them into his own reproduction. The same Court of Appeals held that was “fair use” and held that there was no copyright infringement. That is why we say “fair use” is hard to explain and judge, without seeing the proposed item.”
- Marc Misthal

“Busch would no doubt claim all possible trademark claims including the basic false affiliation otherwise known as a likelihood of confusion and add to it a dilution claim which protects famous marks being used on goods other than those used by the trademark owner. Traditional trademark confusion claims are limited to similar goods. So use of the term BUD for non-beer related goods and services has been enjoined in past under the general dilution theories which include blurring and tarnishment of a famous and well-known mark.

You mention the Barbara Kruger copyright case. That case is reported as Ms. Kruger prevailing and dodging a bullet despite appropriating the photographic creation of another. Fortunately for Ms. Kruger, the copyright in that matter was not enforceable, as it was an expired foreign copyrighted work which fell into the public domain. Ordinarily copying or appropriating another’s creation would be actionable under U.S. Copyright laws.

When in doubt ask for permission or seek a clearance from a copyright attorney. If using another’s trademark, is it abundantly clear the trademark owner has not licensed the use or is affiliated? Trademark uses of another’s mark should be avoided if it likely to raise a question of false affiliation. When in doubt an express disclaimer of affiliation and/or appropriate trademark notice may limit risks of objection.

There are concepts of “fair use” a legal term, in both copyright and trademark law, such as when the use is for parody or satire, so exceptions to the rules always apply resulting in the “maybe” answer most lawyers will provide. First Amendment issues are also intertwined with artistic expression. But if the art takes the form of commercial intent-to-profit, one can see why an intellectual property owner, in this day and age of licensing IP rights in every shape and form, would likely object to most any use where money is at issue.”
- Jeffrey H. Greger

“The first sale doctrine gives very limited protection to the artist. The owner’s claim of trademark dilution trade dress along with trademark infringement, are other concerns. Again, I think it is helpful to define these “legalese” terms. Trademark dilution can occur when there is a famous mark like Tiffany involved – the owner can claim that the use of its mark is blurred, tarnished or lessened in its ability to distinguish its good and services. One can imagine an instance where a famous trademark owner may not like the controversial manner in which an artist uses it mark. Trade dress gives a broader scope of protection than trademark protection because it focuses on the entire image of a product rather than on a word or symbol; however, the trade dress must be considered distinctive such that a consumer would associate the trade dress with a particular good or service. For instance, the predominantly red and yellow aerosol spray can for Pam could be considered trade dress. The trade dress owner must show that the artist’s use of the trade dress creates confusion among the public – the question then becomes – would a customer be confused as to the affiliation between the creator of the collage and the brewery who made the beer? In some cases, it is possible but in others maybe not. Again, I think the safest cost is to seek permission from the trade dress or trademark owner.”
- Monica P. McCabe

I’d like to extend a special thanks to Jeffrey H. Greger on some back and forth over this issue as he answered my questions. I imagine it’s a hot topic for readers here at Smaller Box, since items made from post-consumer materials are a popular trend. I asked Jeffery if he could find any case law related to this issue and here’s what he reported back…

“Case law revealed an interesting dispute over refurbished, washed, remarked, golf balls. The reseller made a clear disclaimer that the balls were refurbished. The district court agreed and denied a trademark injunction and the appellate court affirmed two out of three.

Applying this to your readers, the take away, make a clear and conspicuous disclaimer and that would really reduce levels of risk. There are cases also on the fake sunglasses they sell on the Jersey Turnpike and NYC streets that say DKNY replicas as a disclaimer and fair use. Sufficient disclaimers go a long way to reducing risk of confusion and averting a trademark dispute. with famous marks the stakes are higher in view of possible dilution claims.

A complete transformation into something that looks like it may be licensed has risk without a clear disclaimer. Always issues of gray.”
- Jeffrey H. Greger

Additional Reading: Intellectual Property and the Arts


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February 24, 2011

Intellectual Propety Laws You Should Know: Parody and Derivative Works

Filed under: Legal Issues — Meredith @ 6:00 am

Today we have input from Philip L Marcus. Philip practices Intellectual Property (copyright, trademark, patent, trade secret) and contract law, you can learn more about him at smallbizlawyer.us.

1. Can you tell us how parody plays into issues of infringement? For example, a pet product manufacturer produced “Chewy Vuitton Designer Handbag Dog Toys” and was sued by Louis Vuitton. The pet product manufacturer won because their product was a parody. Is parody normally protected in that way?

“Everyone knows Roy Orbison’s (and William Dees’) “Oh, Pretty Woman” from 1964. In 1989 2 Live Crew did a parody called simply “Pretty Woman.” Eventually they were sued for copyright infringement. Their defense was that the copyright law has an express
exemption for “fair use” and their parody fit right in there. A unanimous Supreme Court agreed, but how they got there tells us something about when parody will be protected.

Although the Court had much to say, I think the critical point made is that parody uses some of the original for purposes of criticism or even derision, and not simply “to avoid the drudgery in working up something fresh.

So, the defense of parody comes from the law of copyright, which has an express “fair use” provision right in what Congress passed. Still, “Chewy Vuitton Designer Handbag Dog Toys” are not a copyright creative. (Nothing that short may be copyright protected—only a substantial work.) Instead, the Louis Vuitton brand is protected by trademark law. It is a very different law, with different history and with different purpose. Copyrights protect creators from having their creatives (books, songs, paintings, etc.) from being copied without their permission. Trademarks were developed to protect customers from being ripped off by imitators. Trademark law has no express fair use provision.

There is no Supreme Court case creating a parody defense to trademark infringement from the context of the trademark law. Still, the federal courts of appeal—there are a dozen of them—seem to agree there is such a defense. The question is what does it take to be successful with that defense if you get sued for your parody trademark?

One of those cases, from 2007, is the Louis Vuitton case you mention. There the court gave us its criterion for acquitting the parodist: “the juxtaposition of the similar and dissimilar – the irreverent representation and the idealized image of a [LOUIS VUITTON] handbag – immediately conveys a joking and amusing parody. The furry little “Chewy Vuiton” imitation, as something to be chewed by a dog, pokes fun at the elegance and expensiveness of a LOUIS VUITTON handbag, which must not be chewed by a dog.”

So, one may parody a copyrighted work or a trademarked product (or product line) by using some of the original, enough to call it to mind, and then making a clear, or better an exaggerated, distinction for humor. Then the parodist will be safe. When it is unclear whether the purpose is humor or laziness there is more risk.”
- Philip L Marcus

2. Can you talk about derivative works. How much does an artist have to change something for it to be considered original? I am thinking of situations like Shepard Fairey being sued by the AP for his Hope poster. I am also thinking about situations like an illustrator using a photo of a dog as reference material for how to draw a dog. Most illustrators use reference photos for their work. Are they endangering themselves if they use anything but live models?

“Mr. Fairey and AP settled their litigation in mid January by a complex group of promises that looks to me like neither side was very confident of its view of fair use and how far that goes. Good call. The suit was about a poster created by Fairey pretty clearly based on an earlier photo by an AP staff photographer of then Sen. Obama.

I certainly do not think nothing short of a live model is safe, but there is a difference between a “reference” photo and an embedded photo. Fairey to me seemed to have embedded the photo in the poster, doing little but add the word “hope” and “posterize” the photo in the Photoshop ® sense (reducing the continuous grey scale to a group of levels). I would have bet on the AP.

The copyright act says whether use is fair depends on factors that “include” these:

(1) the purpose and character of the use, including whether such use is of a
commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in
relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the
copyrighted work.

So, if you undercut the creator’s market, do it for your own profit and use a lot of the original you are going to lose. If you use a piece of the copyright original, you do it to show how you agree or disagree with it but not to grab the creator’s (artist’s or author’s) market share, you will be ok.”
- Philip L Marcus


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February 23, 2011

Legalese You Should Know: What the Heck is “Trade Dress”?

Filed under: Legal Issues — Meredith @ 5:52 am

I asked attorneys to weigh in on the following questions. Today we have input from University of Akron School of Law Professor, Ryan Vacca. You can find more of Ryan’s writing here. We also chatted with Ian H. Gibson of One LLP. In addition practicing copyright, trademark and entertainment law, Ian also writes a blog titled “The Artists’ Advocate“.

1. Can you explain the issue of trade “dress” to my readers. For example, can a person who sells liquid soap design a soap dispenser that looks like a glass coke bottle?

“Trade dress is the distinctive features of a product’s packaging or the design of the product itself. This can include features such as size, shape, colors, textures, graphics, and the like. The glass Coke bottle is a perfect example of trade dress. Coca-Cola has trade dress protection for this unique bottle design.

In addition, trade dress protection only exists if the trade dress identifies the source of the goods. That is, if consumers do not associate seeing the trade dress with who manufactures/supplies/sponsors the product, then there is no trade dress protection. The Coca-Cola bottle is a good example of this point as well. The Coke bottle is a highly recognizable item and when people see a bottle of that shape, they immediately think of Coca-Cola.

A liquid soap seller who designed a soap dispenser that looked like a glass Coke bottle might receive a cease and desist letter from Coca-Cola because it could be infringing Coca-Cola’s trade dress.”
- Ryan Vacca

2. How far does trade “dress” go? If I’m an illustrator and I draw a generic sewing machine, can Singer come after me legally? (Assuming my drawing is a generic sewing machine and not a drawing of a Singer.)

“Trade dress protection does not allow the owner to prohibit all uses of the trade dress. The protection is limited to prohibiting others from using a trade dress for their products that would result in a likelihood of confusion by consumers. There are a variety of factors that courts use to determine whether one person’s trade dress is confusingly similar to another’s, including the similarity of the designs, how well the designs are known by consumers, whether there has been any actual confusion by consumers, and the similarity of the products.

The example you give about drawing a generic sewing machine would not constitute trade dress infringement. That would be an example of Singer trying to prohibit a use of its trade dress that is not tied to consumer confusion and would fail on a variety of different grounds including your use of the drawing not being likely to cause consumer confusion.”
- Ryan Vacca

“If, in fact, the drawing is of a generic machine and not a Singer, the illustrator is on solid ground. An interesting twist would be if the illustrator intentionally drew a Singer machine; would Singer have a legitimate claim of infringement? Unfortunately, I have to give you a typical lawyer answer here and say it depends. Knowing that the law seeks to prevent false association, the context of the illustration becomes important. Is it in an advertisement for Brother or Viking? Is it in a parodic cartoon poking fun at the Singer brand? Context is everything. There is a line at which the concerns of freedom of expression trumps trade dress concerns, provided it is not in a strict commercial context.”
- Ian H. Gibson

3. So what do you recommend an artist does if she is facing a scenario like the one described above with Singer? (I am no in way saying Singer does this, I am just using this as an example.) The issue I see is that there are companies who patrol the web for anything they can claim is “infringement” even if they don’t have much of a case. They then try to get the artist to give them cash under threat of lawsuit. These companies make their money on making these claims, true or not, and often intimidate people into giving them money. Usually some sum that seems cheaper than hiring a lawyer to fight back.

“You are correct that there are companies who are overaggressive in asserting infringement of their trade dress and trademarks. These “nuisance suits” are sometimes used by companies to get a quick settlement because they know it will be cheaper to pay them a fee than to hire a lawyer. There are a couple approaches to this problem. One option is to hire an attorney and have them respond on your behalf. Because of the expense, this may not be a viable option. Another option is simply to ignore the letter sent by the accusing party. If the threat is just a threat and there is no basis for the claim, then it’s unlikely the accusing party will actually file suit to enforce the claim because this will cost them money as well and will end up being a net loss.”
- Ryan Vacca

“For suits that are truly baseless – which is rare considering attorneys can be sanctioned or even disbarred for engaging in such an activity – contact a lawyer immediately. After evaluating the situation, the attorney may find that responding with a letter telling the oppressive business to pound sand is your best option. Certainly, ignoring the issue is the worst thing you can do.”
Ian H. Gibson

4. On the flip side, what should an artist do if she is contacted about infringement in a situation where she is in the wrong?

“In a situation where the accused infringer may be committing trade dress or trademark infringement, then there are a variety of options. The infringer probably should contact an attorney to help determine the best way to respond, but some options include: (1) stop using the trade dress or trademark and pick something else that is not infringing; (2) see if the accusing party is willing to enter into an agreement where the infringing party can continue to use the trade dress or trademark in exchange for paying a fee; (3) litigate the case if it’s a questionable case and the ability to continue using the trade dress or trademark are important.”
- Ryan Vacca

To be safe, Ian H. Gibson recommends you contact an intellectual property lawyer right away, should this come up.


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February 22, 2011

Trademark Infringement and Registering Your Original Work for Protection

Filed under: Legal Issues — Meredith @ 5:35 am



Today we have input from intellectual property attorney, David Madden. David is affiliated with Mersenne Law LLC, a firm that specializes in Small Business, Startup and Intellectual Property Law. In addition to his contributions to this article, David recommend his article on Tips for Designers on How Best to Protect Their Work and his presentation Appropriation and Fair Use. We also got input from entertainment attorney Edward Elkins and intellectual property attorney Kevin A. Thompson of Davis McGrath

1. What steps does an artist need to take to protect her intellectual property? Does she need to file a copyright for everything she designs? Does she need to trademark her logo? Does the artist have to file for protection in multiple countries?

“There’s a whole treatise worth of questions there; the answers vary wildly depending on the type of art and the sorts of threats she wants to protect it from. I can say, though, that she probably doesn’t have to file a copyright on every design — in the US, copyright comes into effect as soon as the work is “fixed in a tangible form,” as soon as it’s written down or saved. A copyright filing is a prerequisite to suing somebody for infringement and can give you some other useful rights, but it doesn’t have to be one of the top things on most people’s “To Do” list.

A trademark on a logo is a good idea, though, particularly if the artist is fond of it and wants to keep using it, or is planning to spend a significant amount of time and/or money on a publication or marketing campaign. Registration can help flush out other logos that might be confusingly similar, and gives you a bit of an edge if somebody shows up later demanding that you stop using your logo because it’s too much like theirs.

International trademark and copyright are whole ‘nother cans of worms, and there are too many variables to give a useful rule of thumb about them. Suffice it to say, if you’re planning a multinational art or design effort, it’s worth a visit to a lawyer to talk about the kinds of things that could go wrong from an IP perspective, and how to prevent them (or at least make them hurt less).”
David Madden

Expert tip from Kevin A. Thompson:

“We proactively recommend that artists register their works with the copyright office on a quarterly basis. It is possible to do a group registration for items like photographs, and the online forms are designed to be simple enough for artists to do them themselves if need be. The application can cost as low as $35.00 if done online.”

2. What exactly is the criteria for trademark infringement?

“This is another question where it’s hard to give an exact answer without knowing details about a particular situation. Trademark infringement occurs when there is a “likelihood of confusion” of consumers about the source of goods or services. But it’s a long time getting to the decision (of a judge or jury) that something is confusing, and for many independent artists and small businesses, it’s too expensive to fight, even if you’re pretty sure you’d win.

For my small clients, I advise strategies to stay away from trouble in the first place — register your own trademarks, and beware that playing around with other people’s designs and logos could get you a nastygram from somebody else’s lawyer. If that happens, you might have to stop doing whatever they’re demanding that you cease and desist, but not always! Some companies overreach on their trademark claims, and some will even put out ridiculous, clearly invalid demands (because who knows? Maybe the other side won’t know any better, and will do what we want them to do!)”
- David Madden

“Generally speaking, when determining if a trademark has been infringed, the court will look to the “likelihood of confusion” which is determined by numerous factors. For example, if you decided to use the logo of a famous brand of camera when selling your own cameras, you can foresee the confusion this would cause. Individuals at the local electronics store in search of the perfect camera might be scratching their heads over a camera who’s brand they recognize, but was not aware of the model’s existence.”
- Edward Elkins

3. How does brand confusion play into it? I’ve read that Andy Warhol’s soup cans are considered non-infringing because the public is unlikely to see the painting as sponsored by the soup company or representing a competing product. Could Campbells have still pressed the issue arguing trademark dilution?

“Campbell’s probably wouldn’t have won a trademark action against Warhol, but they could have cost him a lot of money fighting about it. And, unfortunately, that’s the way a lot of litigation goes these days: the goal is not to win (although that’s a nice outcome). The plaintiff is happy merely to punish the defendant and thereby warn others that they should stay far, far away from the plaintiff’s business — even farther than the plaintiff has a legal, defensible right to demand.

Trademark suits — all kinds of suits, really — often turn on miniscule details, which is why it’s hard to give specific advice about general areas of law. But it’s useful to take a step back and understand why businesses send C&Ds and file lawsuits. For big business, the law is just another tool they can use to keep competitors at bay. Sometimes a lawsuit actually achieves the result that people generally think a law was designed to accomplish, but it’s critical for entrepreneurs to understand that their bigger rivals are not particularly concerned with playing fair or following the law, except when it serves their bottom-line business interests. A bogus C&D that scares an upstart designer away from a big account can be a great investment for an established company. And the best way for a small player to tell “legitimate” from “bogus” is to talk to her own lawyer.”
- David Madden


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February 21, 2011

Legally Protecting Your Original Designs

Filed under: Legal Issues — Meredith @ 7:30 am

Today we have input from intellectual property attorney Aaron M. Kelly. You can learn more about him at aaronkellylaw.com. I also chatted with intellectual property attorney, Leila Amineddoleh of Lysaght, Lysaght & Ertel and intellectual property attorney, Joshua Graubart

1. What should an artist do if her designs are being infringed on? For example, what if an illustrator finds that a larger company is using her illustrations on printed shirts or bags, what recourse does she have? What happens if an American artist finds her work being stolen by a UK company for example?

“There are a number of options.

First, the artist should have ensured that she registered the copyright of her illustrations as soon as she could after publishing them. This is not necessary for artwork to be copyrighted, as that happens immediately upon creation, but having a registered copyright prior to the work being infringed by another party means that she can claim statutory damages in a lawsuit. This establishes a mandatory minimum judgment in her favor, as opposed to leaving it completely up to the courts.

Second, a Cease & Desist letter should be sent to the alleged infringer. This is important because in any tort, the judge will consider whether the plaintiff acted to mitigate the damages caused by the defendant. Requesting that the defendant stop using the infringing material makes it clear to the infringer that someone is asserting their copyright, and the infringer may then be punished with a larger judgment against them if they ignore it. A Cease & Desist letter will not prevent the copyright owner from suing for damages already caused if the infringer complies with it, but it will enable the copyright owner to get an even bigger judgment if the infringer does not comply with it, so there’s no downside to sending one.

If an American artist finds her work being infringed on by a UK or any other foreign company, there are two options. The first is to sue in the foreign court system where the defendant lives. This is not preferable because it will require the retention of a foreign lawyer, and potentially expensive travel to the foreign country to testify as a witness.

The second is to sue in a court local to the artist, and then domesticate a successful judgment in the foreign country where it can be enforced by their local courts. This is preferable because it requires minimal travel, and only a portion of the case will require a second lawyer in the foreign country. It’s also a great strategy for some of the scummier copyright infringers overseas, because many will not respond to a lawsuit from the United States under the impression that they can just ignore the laws of foreign countries. Little do they know that this just enables the plaintiff to obtain a default judgment against the infringer, and enforce it in the local courts where the infringer’s assets are located. This works in the opposite direction, too, so Americans should beware before they ignore a foreign lawsuit.

(Aaron has an article about enforcing copyrights in one of the more common infringers in the European Union, The Netherlands, which you can read here.)”
-Aaron M. Kelly

“Generally, an American artist owns the copyright in her work from the moment she creates it (this is also true in most other countries, though it did not used to be true in the United States). Her work is protected in the US and in any country with which the US has a copyright treaty, or which is a signatory to the Universal Copyright Convention, the Berne Convention, or the TRIPs Agreement. (Almost every country is one of these – all WTO members are signatories to TRIPs). Consequently, if someone makes use of her work either in the US or abroad without her permission, her copyright is probably being infringed.

However, while the work is *protected* from the moment of creation, in order to enforce that protection, the work must be registered with the U.S. Copyright Office. It is highly advisable to register works before or as soon as possible after their publication, as swift registration allows the copyright holder to benefit from increased (called “statutory”) damages from infringement. Statutory damages can often make the difference between an enforcement action which is, and which is not, economically efficient to pursue. In other words, without statutory damages, an infringement action is often not economically worth pursuing.

As a rule, larger infringers are preferrable to smaller ones, as larger infringers are more likely to be able to compensate the artist for infringement. Smaller infringers may simply disappear, or default on awards of damages.

If a British entity infringes an American artist’s copyright, an infringement action may only be possible in the UK. However, if the UK entity has significant ties to the United States, especially if the infringer’s product is distributed in the United States, an action in the United States is possible. Generally, an action in the United States is preferable, as damages are likely to be higher under the statutory damages rule.”
- Joshua Graubart


2. If an artist designs something on contract, for example a freelance designer designs a logo for me, who retains the IP rights to the logo, the artist or the client? If the client retains the rights, can the designer reuse elements of the logo in other designs? Can the designer stipulate that they only do logos they retain rights to? What about a designer that you hire to do a portrait for you? Do you own the rights to make prints of it or does the artist retain the rights and control whether prints can be made? What if you hire someone to design a dress for you? Who owns the design? The person paying to have it designed or the designer?

“As with any property, artists and their employers should amend the parameters of a contract to suit their needs (as long as the provisions in the contract are not illegal). For this reason, it is in an artist’s best interest to protect his or her designs with a well-drafted contract. A contract may set forth provisions for split rights to designs. For example, an artist may opt to retain the intellectual property rights to his work, and license the designs (or partial designs) to the client. Conversely, the artist may sell the intellectual property rights to the client, and retain the right to use the designs in a portfolio, for limited usage, or for copies. Artists and their clients (and/or their attorneys) can be creative in drafting contracts that encompass all of the parties’ wishes: these contract clauses may include time limitations, licensing agreements, shared intellectual property rights, etc.

(Important note: If an artist is classified as a Work-For-Hire employee, the default rule is that the employer will retain ownership of the intellectual property rights.)”
- Leila Amineddoleh


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February 17, 2011

Patents Copyrights and Trademarks Oh My

Filed under: Legal Issues — Tags: , , — Meredith @ 8:37 am

For the next few posts, intellectual property attorneys will be weighing in on legal issues for small business.Today we have input Steven Weinberg of Cowan, DeBaets, Abrahams & Sheppard LLP.

1. Can you explain the difference between copyright, patent and trademark in some layman’s terms for us non-lawyers?

Trademark law protects distinctive brand names, logos, designs (think the Golden Arches or the Nike Swoosh) and other distinctive things (sounds, aromas, packaging designs, and more) from being used in a deceptive way, and protects consumers from purchasing what they think is a genuine branded product but turns out not to be. Trademark law protects distinctive names, logos, etc. as they are used for products as well as for services (like tv shows, legal services, restaurant services, etc). A “trademark” is a protected name, logo, etc. used for products and a “service mark” is a is a protected name, logo, etc. used for products. Trademark rights in the US are created by actually using the trademark or service mark, but one can obtain exclusive national rights through the federal registration process, and/or just in specific states through the state’s trademark registration process. Trademark protection lasts for as long as one is using the trademark or service mark, but a federal registration has to be renewed every 10 years.

Copyright law protects original creative works from being substantially copied and used without the permission of the copyright owner. It also protects against the creation of derivatives of the original creative work. The kinds of works protected include literary works, graphic works, musical works, choreography, motion pictures, certain kinds of architecture, and just about anything that is expressed in an original way. Copyright protection is automatic – if you have created a work protected by the copyright law, it is protected. But in the US you need to register your claim of copyright with the US Copyright Office in order to be able to sue for copyright infringement and obtain certain remedies. Copyright law does not protect ideas, processes, systems or concepts or the design of a functional article, such as clothing designs or furniture designs (there are some limited exceptions). Copyright law is limited in duration. For corporate works, it is generally 95 years and for individuals for the life of the author plus 70 years.

Patent law protects useful inventions and discoveries which, to qualify for patent protection, have to be “novel” and not “obvious” to a person skilled in the art. Patent protection covers inventions and discoveries of any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement of any of them. The only way to get patent protection is to be granted a patent by the US Patent and Trademark Office, which usually takes many years to get. Having patent protection means that the invention cannot be commercially made, used, distributed or sold without the patent owner’s consent. Patent protection is only for 20 years.

What is the biggest/most common mistake you see small businesses and artists make in the area of intellectual property?

Not knowing the rules about what they own and what they don’t own. Many small businesses assume that if they pay a freelance artist to create a copyrightable work for them that the business owns it. They don’t. Unless there is a written document signed by the artist that says that the work is a “work made for hire” or that the artist is assigning all of its rights in the work to the small business, the business only gets a non-exclusive right to use the work, with the artist retaining all of the other rights.

Similar mistakes are made with inventions or discoveries that are patentable. And here’s where employment law becomes involved. Under copyright and trademark laws, anything created by an “employee” that can be used in the employer’s business is owned by the employer. So it is very important to make sure that there is clarity about whether the artist is an employee or an independent contractor. And just because an agreement says that the artist is an independent contractor doesn’t mean that for labor and tax purposes, as well as for intellectual property ownership purposes, the artist actually legally is an independent contractor, so one has to be really careful here.


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February 14, 2011

Beware the Brand Bully

Filed under: Legal Issues — Meredith @ 9:36 am

Today’s guest post is by Intellectual Property attorney Lara Pearson. Lara has an intellectual property blog called Brand Geek.

Simply put, Brand Bullies are companies or individuals that over-assert their trademark rights. I’ve practiced trademark law since 1999 and have experienced instances of brand bullying at least a couple times per year.

A bit of background probably will help. For the most part, trademark rights are based on use — the first person/entity to use a mark in interstate commerce (the Senior User) can prevent all others from using an identical or similar mark for the same or similar services as those offered by the Senior User. Additionally, trademark rights generally relate to those specific goods and services offered by the Senior User, e.g. RIMON for legal services; SMALLERBOX for advertising and information services; LOHAS for educational services, etc. Trademark infringement happens when consumers are confused into thinking a relationship exists between brands when one does not really exist. Most often this occurs when a Junior User adopts a mark that is identical or similar to the Senior User’s mark for goods/services that are the same or closely related to those offered by the Senior User.

By way of example, my law firm can prevent other law firms and legal forms providers from using RIMON, RYMON, or RAMONE. Likewise, SMALLERBOX can stop others from using SMALLERBOX or SMALLBOX for marketing or business consulting services. However, neither Meredith nor I would not be able to prevent a restaurant from opening under RIMON or SMALLERBOX, because restaurant services are unrelated to what each of us does, thus consumers are not likley to be confused by the use of SMALLERBOX or RIMON for restaurant services. Get it?

Brand Bullying happens when brand owners demand that others cease use of their mark without regard to the relatedness of the goods/services being offered. Some Brand Bullies, like the infamous Leo Stoller, demanded licensing fees from others using marks similar to his own, regardless of whether consumer confusion was likley. Lots of trademark owners capitulated and paid Leo’s licensing fee, which was less expensive than defending against his frivolous claims in court. Other Brand Bullies simply demand that the Junior User cease use of its mark under threat of legal action, which oftentimes the brand owner cannot afford to defend.

If you receive a cease and desist (“C&D”) letter, it is best to consult with an attorney to determine the validity and seriousness of the claims made therein. If your attorney believes that you’ve fallen prey to brand bullying, then you can work together with your attorney to determine the best course of action. Over the course of the past 12 years, in response to Brand Bullies, I have counseled clients to: (a) change marks; (b) fight back; (c) provide the correspondence to the media and (d) ignore the demand — it all depends on the specific circumstances, and every case is different.

For the next several post I’ll be sharing more insights from Intellectual Property lawyers on subjects that pertain to small business and artists. Stay tuned. – Meredith

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