Strengthening Trademark Protection Through Copyright 2016/2017: A Global Guide
This article first appeared in World Trademark Review Yearbook 2016/2017, a supplement to World Trademark Review, published by Globe Business Media Group – IP Division. To view the guide in full, please go to www.worldtrademarkreview.com
In the United States, brand owners traditionally protect their logos under the Lanham Act by obtaining trademark registration protection from the US Patent and Trademark Office and employing trademark law principles to combat infringement. When one thinks of well-known logos, trademarks such as the Nike swoosh and the Target bulls-eye logo immediately come to mind.
But for certain logos, copyright law may also be employed to enhance and protect the brand owner’s IP rights. These two legal regimes are based on entirely different principles and serve different purposes: trademark law is premised on avoiding consumer confusion in the marketplace and protects brand owners, while copyright law serves to protect expressive works and their creators. Because of these disparate goals, brand owners sometimes do not think that copyright law is applicable to brands (and sometimes it is not). However, copyright law can be an extremely useful tool for combating infringement and the import of grey-market goods.
There are a number of unique advantages to using copyright law in addition to or in lieu of trademark law when seeking relief from infringement or counterfeiting. One advantage is that the test for copyright infringement can be easier to meet than the test for trademark infringement under the Lanham Act. Trademark infringement is determined by a highly fact-intensive inquiry that considers several factors, including the similarity of the marks and the relatedness of the goods or services for which the marks are used. The test for copyright infringement looks only to whether the designs are substantially similar; product similarities, marketplace conditions, and consumer confusion are of no import. Another advantage is that copyrights are not limited by class, so if a party’s logo is used on goods that are not covered by (or related to) those identified in its trademark registration, that party may still obtain relief for copyright infringement. In addition, if copyright is registered in a timely manner, the prevailing party in a copyright infringement action may be awarded a recovery of statutory damages and attorneys’ fees without an ‘exceptional case’ showing. Such remedies are not so easily available under the Lanham Act.
Thus, for logos that also qualify for copyright protection, copyright law may provide the brand owner with greater ammunition and additional remedies for combating infringement, counterfeiting, dilution, and hijacking. Copyright protection may also be useful when the logo cannot be, or has not yet been, protected as a trademark.
Is the logo copyrightable?
A threshold issue, and the most significant obstacle to obtaining copyright protection, is that the logo must be sufficiently original to qualify for copyright protection. Under Section 102 of the Copyright Act, copyright protection extends only to original works of authorship. Copyright laws’ originality requirement excludes words, short phrases, and simplistic designs from the realm of copyrightable subject matter.
Originality, in the case of copyrights, generally equates to creativity. In the United States, the level of creativity required for copyright protection is “extremely low; even a slight amount will suffice.” The threshold is so low, in fact, that the “vast majority of works make the grade quite easily.”
However, while originality seems easy to prove under this standard, the Copyright Office consistently rejects applications to register logos that do not display originality. For example, the logo used by Best Western for its hotel chain was refused registration, as was Coach’s CC logo.
Logos registered by the Copyright Office include a car dealership logo that features the words “Car Credit City” with a number of shapes, a “No Soliciting” sign depicting a stick figure holding a briefcase, the Baltimore Ravens logo, the Starbucks siren logo, and the Omega globe design engraved on the back of Omega watches.
The Car Credit City logo is a prime example of utilising copyright when trademark protection may be unavailable. While a copyright must be filed in a tangible form to receive copyright protection, there is no use in commerce requirement for copyright registration. Car Credit City obtained a copyright registration for its logo but abandoned its trademark application for the identical logo when it failed to filed a statement of use.
Importance of US registration
While copyright protection arises automatically (without registration) once the work is filed, registration is required to commence a copyright infringement litigation in the United States of a US work (i.e., first distributed to the public in the United States). This is not the case with trademarks, as the owner of an unregistered trademark can file suit for trademark infringement without a federal trademark registration under Section 32 of the Lanham Act. However, a copyright registration is far easier and less expensive to obtain than a trademark registration and requires no post-registration maintenance. Further, as with trademark registrations, copyright registrations can be used with customs agents to prevent the distribution of counterfeits.
A copyrightable logo should be registered promptly with the Copyright Office. If registration is obtained before infringement, or after infringement but in the three months following publication of the logo, the prevailing party in an infringement litigation may elect to recover statutory damages (in lieu of actual damages) and obtain an award of attorneys’ fees.
Further, if registration is obtained within five years of first publication of the logo, the registration certificate is prima facie evidence of the validity and ownership of the copyright and of the facts stated in the certification of registration.
Preventing the distribution of grey-market goods
A great example of the usefulness of copyright protection for logos is found in Omega v Costco. Omega SA – a luxury watchmaker based in Switzerland that distributes its watches through authorised retailers only – owns a US copyright registration for the Omega globe design, which appears on the back of Omega watches. Costco, a wholesale club, purchased authentic Omega watches through the grey market from foreign resellers, which it resold in its discount stores in the United States. Omega sued Costco for copyright infringement, alleging a violation of the Copyright Act’s provision prohibiting the import of copyrighted works into the United States without authorisation from the copyright holder. The trial court ruled in favour of Costco, which asserted a first-sale doctrine defence; however, the appeal court reversed, finding that because the Omega watches at issue were manufactured and first sold outside of the United States, the first-sale doctrine could not act as a defence and Costco was liable for copyright infringement. The Supreme Court affirmed by an equally divided court. By registering the Omega globe design with the US Copyright Office, Omega was able to shut down a large-scale resale scheme of its watches via the grey market – a distribution channel where US trademark law provides little remedy for infringement because it prevents only the sale of parallel imports that are “materially different” from the products authorised for sale under the mark (in Omega, Costco was reselling authentic Omega watches).
Protection for logos outside the United States
Copyright law may also provide relief against infringement of logos outside of the United States in countries where a brand owner may be unable to take advantage of trademark law because:
- it has not sold goods or services under the logo and thus cannot establish trademark rights;
- trademark registrations have not yet been secured; or
- existing trademark registrations cover different classes of goods or services.
Importantly, there is no ‘use in commerce’ requirement for copyright, making it easier to secure relief in countries where rights holders pursuing cases against infringers often get bogged down with the technical requirements for compliance with local trademark law. In addition, the Berne Convention enables cross- jurisdictional enforcement of copyright so that logo owners may deter and prevent copyright infringement abroad without obtaining copyright registration before filing a suit.
In China, there has been a growing trend to rely on copyright registration as evidence of a ‘prior right’ that is successfully asserted in opposition proceedings. The Ritz Carlton lion and crown design, the Tesla T design, the Illinois Tool Works ITW logo, and other logos with sufficiently distinctive designs have been recognised as a prior right under Article 31 of the Chinese Trademark Law, which provides that “an application for registration of a trademark shall not create any prejudice to the prior right of another person.”
Copyright ownership considerations
While employing copyright law may sound like an easy and attractive alternative form of protection for logos, it can be tricky to navigate particularly when it comes to ownership. Brand owners and practitioners need to keep in mind that the ownership of trademarks and copyright is vastly distinct.
Under US law, trademark rights are acquired through use in commerce of a mark. Not so for copyright, where there is no use requirement and ownership vests initially in the original author of the work. The single exception to this broad and fundamental principle is when a work is created as a ‘work made for hire,’ in which case the employer or commissioning party is considered the author and copyright owner. However, a valid work made for hire arises only where:
- the work is created by an employee within the scope of his or her employment; or
- the work is specially ordered or commissioned and fits in one of nine categories enumerated in the Copyright Act, and the parties agree in writing before work commences that it is a work made for hire and thus owned by the hiring party.
Copyright counsel are sometimes presented with brand owners that ‘own’ a logo trademark through sales of products or services under the mark, but have neglected to ensure ownership of the copyright in the logo as a work made for hire. In these cases, the copyright may be acquired by a written assignment signed by the original creator of the logo.
A work made for hire agreement is preferable to an assignment because an assignment of copyright may be terminated and reverted after 35 years.
International design registration
Another form of protection for logos is international design registration. While 64 countries across the world have been using this mechanism for the protection of industrial designs for some time, the Hague Agreement Concerning the International Registration of Designs was not implemented in the United States until very recently. However, as of May 13, 2015, US companies can file for international design registration through the streamlined and cost-effective Madrid Protocol filing process. International design registration is available for three-dimensional features of a product (shape), as well as for two-dimensional features (e.g., patterns, lines, colours) such as logos.
For logos that are protectable under both trademark and copyright law, copyright law can provide valuable relief and remedies where trademark law does not. Brand owners and IP counsel should regularly consider relying on copyright law as an additional form of protection for logos which historically have been protected as trademarks. Indeed, if a logo exhibits sufficient creativity, it can be registered with the US Copyright Office easily and inexpensively. If copyright registration is acquired prior to infringement, the right to recover statutory damages and attorneys’ fees is a powerful weapon in a brand owner’s arsenal. Where possible, it can pay to take advantage of alternative forms of protection for logos neither copyright nor international design should be overlooked.
** However, please note that the decision in Omega v. Costco was later abrogated by the Supreme Court’s decision in Kirtsaeng v. John Wiley & Sons, Inc., which found that a copyright owner’s distribution and importation rights expire after an authorized first sale of the work in a foreign jurisdiction, rendering the first-sale doctrine a viable defense in certain cases. In addition, Omega was later found to have misused its copyright by using its logo design in a manner violative of public policy. Thus, before stamping your product with a copyrighted logo design solely for the purpose of controlling importation or distribution, it is important to evaluate the subsequent holdings of Kirtsaeng and Omega.