Best of 2010: Trademarks, copyright, brand equity, and rent-seeking: Soapbox 2010
First posted on January 17, 2010.
From last week’s INTA Trademark Topics email discussion list. One name has been changed to protect the innocent, and the links, by way of annotation, have been added, as have arbitrary pictures meant to break up the monotony.
—–Original Message—–from: ATMLawyer@changedtoprotecttheinnocent.orgto: INTA List <firstname.lastname@example.org>date: Tue, Jan 12, 2010 at 5:18 PMsubject (INTA List): movie title or characters or theme as trademarkmailed-by: lists.inta.orgOn Tue, Jan 12, 2010 at 5:18 PM, A TM Lawyer wrote:
Client wants develop a family of marks that adopt or suggest an old and famous movie or its characters, plot, or theme. Lets say someone wants to put out wine branded, GONE WITH THE WIND or maybe FRANKLY, I DON’T GIVE A DAMN, or branded with the name of one of the characters, or branded with something that suggests a famous scene from the movie. Thoughts on how to analyze this? Does it matter that the owner of the movie rights has never conducted a merchandising program, has no trademark registrations for the names, has never sold the subject goods (wine in my example), and maybe never sold anything branded in this manner?/blockquote>
On Wed, Jan 13, 2010 at 1:44 PM, Ron Coleman <email@example.com> wrote:
TM Lawyer, your client sounds very creative. So you’ll want to nip that right in the bud.
Your advice should not place undue weight on the so-called merits of the inevitable legal challenge to your client’s business. These are irrelevant unless your client is funded for extensive litigation. And because many non-specialists are under the impression that if they win a trademark case, they can “get fees,” be sure it understands that fee shifting will never be granted to a defendant no matter what. If your client can, however, build the cost of litigation into its early-stage budget, you will want to explain the following:
Your premise, naturally, is that there is some sweet spot where a business such as the one you describe makes the least possible incursions onto any cognizable rights of the original “property,” yet maximizes its benefit from the goodwill associated with it. Finding that spot will be pretty elusive, however.
As you know, it is “well established” that the there is little or no protection for the titles of literary works. (UPDATE: Nota bene via @MegLG!) But that’s just what a bunch of old cases say. Today we have “brand equity,” so your client will be wise to do as you suggested and go with with allusive, rather than direct, references to the “property” in question. There is no sense in making this too easy for the other side!
I agree with you, too, that by traditional standards the would-be challenger would have an uphill battle proving secondary meaning. But in the post-Warhol world, fame (the sine qua non of trademark dilution) is everything. After all, your client’s business model is premised on exploiting the fame and “brand” equity accreted around these creative works. No registered marks are in play, so as you know federal dilution claims should be off the table.
But how vulnerable is your client to claims of state-law trademark dilution and infringement and Lanham Act section 43(a) claims for unfair competition and false designation of origin? The legal answer to all these is likely to come down to this: Is this new business “exploitation” of and “piggy-backing” on some untouchable bit of Intellectual Property ripe with Brand Equity? After all, people may think your client’s stuff is “endorsed” or “authorized” by the original creators, or studio, or the fictional characters, or whatever.
If the judge rolls that way, no survey or other competent evidence is likely to be required to demonstrate a likelihood of confusion (or of dilution). On the other hand, a judge could decide your client is merely making a sly cultural reference, not infringing anything at all, as in, say, the “Chewy Vuitton” scenario.
Also remind your client that copyright has its own penumbras and emanations, and can often be seen quacking very much like a twademark–consider the recent “60 Years Later” ruling granting a monopoly to J.D. Salinger on the concept of Holden Caulfield. If there’s any way copyright can be assserted against your client, which is likely considering that the work you refer to does have a copyright, it will be. Then it’s a whole new ballgame–attorney fees and statutory damages are very much in play! Well, not for your client. For the other side. So that’s in the budget, too. Well, IP litigation doesn’t cost so much in legal fees, does it?
Ultimately your client must know that there some significant percentage of judges, almost inevitably ones who with the best of intentions but little background in copyright and trademark, that feel a need to ensure that there’s a soft, spongy legal cushion around brand equity and the profitability of the companies that claim it.
But as to handicapping the outcome, nothing is more important than making sure your client understands that this will depend on which time zone it gets sued in, which judge it pulls, and what the judge’s clerk had for lunch. Try as we might to navigate the sea of commerce with the compass of McCarthy in one hand and Nimmer’s sextant in the other, no chart reveals the judicial squalls, much less the jury sea monsters, that menace from below.
On the other hand, the judicial expansion of IP at the expense of competition is not all bad. Some of these judgely grants of broad swaths of semiotic territory to IP “stakeholders” could work in your client’s favor. You say that your client is interested in establishing a “family of marks.” This dubious concept also sprang fully formed from the head of the judiciary. If your client makes it past the initial assault, a fine upstanding family of trademarks could spell an ongoing family of revenue streams–and its own cottage litigation business. Good for the client, and good for you and me!
A-a-a-a-nd…. on the other other hand, could we say that this very prospect (the development and promotion of a “family of marks” based business model) should itself cut against a fair use defense? Well, that’s what I’d say — if I woke up and found a positive balance in my checking account and the other side’s Redwelds in my big old square trial case.
Bottom line: Your client needs to ascertain that there is enough up side to this concept to justify financing the litigation and the appeal, win lose or draw. Great thought exercise! Get paid in advance, is all. And good luck!