Copyright in the Internet Age Part 1

Sally, your long-time client, rushes into your office one afternoon. “I have a great idea and we both can make a lot of money from it,” she exclaims. “You know that Mr. Peanut character that’s on all those Planters cans? Well, let’s just change a few things – color, name, etc."

Never one to argue with a client too early, you ask for more details. “OK,” says Sally, “here’s the plan.” And off she goes: instead of Mr. Peanut, she’ll name it Sally’s Boutique; and get rid of the yellow, use purple instead; and finally, dump the shoes (too old-fashioned) and use something trendier. Sally recounts the obvious promotional products that could showcase her great new design: banners, signs, mousepads, mugs, notecards, calendars – the sky’s the limit! Get your scanner fired up and let’s get to work. No problem for you or Sally, right?

MR. PEANUT’S LEGAL PROTECTIONS

Or maybe not. Mr. Peanut has something to say – legally – about Sally’s scheme, and his message involves both copyright and trademark law. First, though, how much do you know about Mr. Peanut?

As an icon for Planters (now owned by Kraft Foods Inc.), Mr. Peanut was first used in 1916, and first registered as a trademark in the United States in 1925. He travels the country in his Planters Nut Mobile and has his own fan club. Of interest to the sign industry, Mr. Peanut first appeared in a billboard high over Times Square in 1942. With this kind of notoriety, Mr. Peanut needs some security. As an advertising logo, he gets it in the form of trademark protection. But as he delves into commercial messages and communications, he also receives copyright protection. But what’s the difference?

In a nutshell (pun most certainly intended) copyright law protects the author (the owner or creator of the expression) while trademark law, on its face, is meant to protect the consumer from false and misleading advertising and communication. The two bodies of law set up this way:

COPYRIGHT BASICS

Copyright laws are federal only and protect the authors of “original works of authorship,” which are “fixed in a tangible medium of expression.” This includes not just books and movies, but graphic design of nearly all varieties. Adding the copyright symbol (©) gives immediate protection to the work. But to have the best legal rights, the expression, for instance, an advertising poster featuring Mr. Peanut, needs to be registered with the United States Copyright Office.

This federal registration creates a presumption in favor of the author of a valid copyright. If a copyright violation occurs, the owner of the registered copyright is better able to recover some damages and usually attorneys’ fees.

Since most of the graphics work that shops do is on behalf of clients (hopefully not too many like Sally) they must face the question of who actually owns the copyright protection. There are three options: first, if he employs a person who creates a design while in the scope of his employment, the employer owns the copyright. This is called a “work for hire.” Second, if that employee creates a design entirely on his own time and not as an employee, he owns the copyright as the “author” of the graphic expression. Lastly, if a client asks for a design and the shop agrees within the terms of the contract to sell him the design outright, the client becomes the author and owner of the copyright.

No matter which party gains the protection, if the copyright is infringed, the owner or author has legal rights to press against the infringer. In a lawsuit, a court will look for, among other factors, “substantial similarity” of the copyrighted expression with the expression used by the defendant, or infringer.

TRADEMARK BASICS

Trademark laws, both federal and state, protect a distinctive word, phrase or slogan; also a symbol or design, or many combinations of letter styles and corporate colors. Mr. Peanut and his particular peanut shape, his colors, his style of clothes and shoes all are part of a Planters logo and are protected under trademark law.

Some words or marks cannot be trademarked. For instance, if Planters had tried to trademark the word “peanut” it would have failed. Or if Planters had failed to use Mr. Peanut for many years, a court might find the icon to have been abandoned.

In our case, Sally wants to trademark the “new” Sally Boutique version of Mr. Peanut. In legal terms, the original Mr. Peanut is the “senior” holder of the trademark and Sally wants to become the “junior” holder of a trademark. At issue is the “likelihood of confusion” to the prudent and reasonable consumer. A federal court looks to see how similar the marks are – the more they are similar, the more confusion the court thinks will be created among consumers. Additionally, it will look at Sally’s intent in creating her “new” mark. If bad faith is found, Sally will not get trademark protection.

PROTECT YOURSELF FIRST

We all hope to avoid client situations like Sally’s. But even in increments from trusted clients, exposure to copyright and trademark infringement can be significant.

Here are a couple of ideas to protect yourself and your business. I hope many of you are already using them. First, ask for a legal release from the client from any liability that you might incur as a result of using in a design or making printed copies of an expression that is copyrighted or a trademarked word or symbol. This release might be expanded to be part of a more general indemnification clause in your contract. Indemnification forces the client to pay for the costs of defending you in any infringement lawsuits. Lastly, if you do a lot of work with clients like Sally, I suggest talking with your insurance agent about getting or increasing professional liability insurance

In my next column, we’ll look again at these issues, but in terms of cyberspace and the Internet. As a graphics professional, you know better than many the pressure to just pick up an image off the Web and use it in a design. What’s legal and what’s not? Answers to follow.

The Fine Print: This column is meant to explore issues of importance to your business. I am not offering legal advice. You will always need to consult with your attorney and other business advisor before considering any of the ideas discussed in this column. Any businesses or persons mentioned are purely fictional and are not based on any real business or person, even in part.