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How to Use Trademark Law to Create Multiple Passive Income Streams & Avert Legal Battles
A great title can contribute tremendously to a book’s success. It can also create opportunities for multiple passive income streams from licensing the sale of book-related merchandise and paraphernalia. In this article, I will share with you valuable tips on how to determine the availability of a title, secure its ownership, and develop passive revenue streams through trademark licensing. I will also explain how to protect against unauthorized use of your title by intellectual property pirates.
What is a Trademark?
Searching for the correct titles is like searching for hidden gold. Properly selected and maintained, your book’s title can be your most valuable intellectual property asset. As I discuss below, under trademark law, some titles are more worthy of trademark protection than others. Trademark law protects words, slogans, logos and even designs that identify the source of goods or services. It also prohibits people from trying to pass off their goods and services using the goodwill associated with an established brand. For example, trademark and unfair competition law are the foundations upon which the best selling Chicken Soup for the Soul, Dummies and Hardy Boys series franchises are based. All three, of course, are federally registered trademarks.
What Are the Benefits of Trademark Registration?
Federal registration is not required. In the United States rights arise from actual use of a mark. Generally, the first to either affix the mark to goods (or display it in connection with services) or file an “intent to use” application with the Patent and Trademark Office has the right to use and registration. The benefits to trademark registration include:
Constructive notice nationwide of the trademark owner's claim.
Evidence of ownership of the trademark.
Jurisdiction of federal courts may be invoked.
Registration can be used as a basis for obtaining registration in foreign countries.
Registration may be filed with U.S. Customs Service to prevent importation of infringing foreign goods.
Brand It! Own It!
If you are an author, it is helpful to think of your book as the headwaters of your very own intellectual property Nile. Best selling author, Robert G. Allen refers to it as “infopreneuring.” As an info-prenueur, the goal is to create multiple merchandise licensing revenue streams that flow from your book (and book title). Your focus is not just creating a best selling book, but best selling book byproducts. Lucrative speaking careers – which can dwarf the royalties your book generates -- often start out as books. From books flow distance learning courses, income generating websites, subscription newsletters, audio products, film and television and other opportunities.
Trademarks & Book Contracts
If you aspire to be a published author, or, if you have been offered a book contract, remember, you, not your publisher should retain trademark licensing rights to the title of your work. Merchandising rights -- which is a category of rights a publisher will seek -- includes the right to license the title of your book, and the characters contained in it, for games, toys, clothing, household goods, as well as innumerable other goods and services. To be clear, “licensing” is where the owner of a trademark gives another party the right to use that mark in exchange for payment of a royalty.
Regrettably, many start-up (and even seasoned) info-preneurs ignore the “grant of rights” clause of their publishing agreement. After signing away their rights, a form of seller’s regret sets in. Contracts clauses are malleable, not words set in stone. The reason publishers have contracts department is because contracts are negotiable. Be respectful of your publisher. Know what to ask for, or hire someone that does. That someone can be a knowledgeable agent or a publishing attorney, or both. Or both? Attorneys in the entertainment industry often play a kind of “central command role,” assisting agents in negotiating publishing and merchandise agreements.
Agent vs. Attorney
Entrusting your career solely to an agent is not quite leaving the fox to watch the hen house, but, as your career develops, the issues that relate to your IP assets, inlcuding image and literary works, becomes increasingly complicated. While most agents are good and honorable people, unlike an agent, an attorney owes his duty of loyalty to the client. Find the right people to help you. No single person, whether agent or attorney, can handle all aspects of your career. And, by having a team (i.e., attorney and agent) you create a true system of checks and balances. Agents, as their name suggests, procure publishers. Attorneys advise and counsel, and negotiate contracts. Both seasoned agents and literary attorneys are also likely to have long-term industry relationships that can be leveraged for your good.
A Copyright is Not a Trademark
Before providing you with the tools you need to select and protect the title of your book, it’s important to note that copyright law does not protect book titles. If you go to Amazon.com or the online Copyright Office records (www.copyright.gov), you will see countless examples of duplicate titles. Under copyright law, copyright protection only covers "original works of authorship." To the chagrin of many, the courts and the Copyright Office have made a bright-line policy determination that titles, names (including pen names), short phrases and mere listings of ingredients (as in recipes), no matter how clever, do not possess enough original expression to warrant copyright protection. Fortunately, there is another way to protect the commercial magnetism of your title and to cash in on it.
Look Before You Leap: Trademark Availability Searches
Trademark and unfair competition law protects against confusingly similar usage of source identifying words and designs (including book jacket design) by another. If you wish to publish a book, or launch a series of books, you run the risk that someone may have already obtained rights to a confusingly similar title. Like any business, as you prepare to launch your book, you want to select an appropriate title that is unique to you, and, if your book is an extension of your business, a title capable of identifying whatever your business offers – or, intends to offer as you expand your brand into multiple, diverse industries or product categories. Since trademark rights are granted on a ”first come” basis, it’s important to determine if anyone is using your title in a trademark sense. This is accomplished by doing a screening search. A screening search will help uncover how a trademark is being used in the marketplace. If it’s unlikely people seeing your book will be confused about the source or sponsorship of your book, there’s no trademark infringement. For example, when Al Franken borrowed Fox Broadcastings “Fair and Balanced” slogan for his book entitled “Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right ,” no likelihood of confusion was found.
A trademark search, and a working knowledge of this nuanced area of the law, is how you determine whether you can use the title you have selected. When selecting a title an author must take into consideration both registered and unregistered marks. Failure to perform a proper search can result in threat of a lawsuit from someone who believes you are a competing with them unfairly. If during the selection process, you discover a confusingly similar title, used for similar goods, or even related services, it may not be available for use or trademark registration with the United States Patent and Trademark Office (http://www.uspto.gov/). Bear in mind, the science of searching and determining if a proposed title is available for use is not always a straight forward proposition.
The timing of your search is critical. Unless you file an intent-to-use (ITU) federal trademark application, you should begin using your mark very soon after determining your mark’s availability. Trademark rights are awarded are on first to use /first to file basis. An ITU application is an application for a mark that is not yet being used commercially. Like fresh milk, the shelf life of a search is measured in hours or days, not weeks. After a short while, the relevancy of a search diminishes because new, confusingly similar products and services may have entered the stream of commerce.
What is Trademark Infringement?
In any trademark infringement case, the key issues are “Who used it first?” and “Was it used on confusingly similar goods or services?” Recalling a published book after threat of litigation will cause both financial loss and professional embarrassment. While the cost of doing a full search can be daunting if you are working on a tight budget, there’s no excuse not to do an internet search. While not foolproof, an internet search can weed out obvious conflicts. If you identify marks – including best selling titles -- that are similar in appearance, sound or meaning, and are used for similar or competitive goods or services, you may have found a potentially conflicting mark. When in doubt, engage a trademark specialist to review your findings. As assessment by a trademark attorney who can decode trademark search results may give you the courage to move forward with your title, or caution you against doing so.
Merely descriptive marks are not entitled to exclusive protection without establishing secondary meaning. By secondary meaning, I mean well-known marks that call to mind a particular publisher, producer or manufacturer. Many claims of exclusive ownership turn out to be bare assertions of rights over non distinctive marks phrases for which there is little likelihood of confusion. If you receive a cease and desist letter don’t panic. Take a deep breath. Consult a trademark attorney who can assess the level of the threat. Sometimes a well-written letter, drafted by counsel (or with the help of counsel), explaining why you believe they have a weak claim and are attempting to unfairly silence you, will get them to stand down. For example, on investigation your attorney may advise you that they don’t have a valid trademark. Or, perhaps, you are using the word or phrase in its “classic” or “descriptive” sense in your narrative, not on the cover to suggest endorsement or an association with the trademark user.
Tip! Keep in mind that both identical and confusingly similar marks for related goods and service may be entitled to trademark protection, and that a trademark owner need not register their mark federally to enjoy trademark protection.
Now that we’ve reviewed the basics, it’s time to focus on which titles enjoy trademark protection, and which don't. Bear in mind, there's a large body of law which addresses what is registrable and what's not, so this, is at best, a simplification of the rules. When in doubt, seek out the advice of a seasoned trademark attorney.
a. Trademark Friendly Title: Series Titles Enjoy Trademark Protection
Generally, titles of works that are part of an ongoing series are protected under trademark and unfair competition law. Once a series title such as Chicken Soup for the Soul becomes identified in the public's mind with a particular author or publisher, unfair competition law kicks in to protect against consumer confusion, enforcing a kind of commercial morality on the marketplace of ideas. Once a series has been established, each work in the series reinforces that it comes from the same source as the others. Being a series author or publisher, is one of the secrets of successful publishing.
Without trademark law, consumers might otherwise be deprived of their ability to distinguish among competing forms of entertainment and information. Likewise, producers and publishers would be denied valuable sequel and adaptation rights in best selling books and hit movies. While some might argue that a world without TWILIGHT 3 is a good thing, trademark law allows us to cash in on the goodwill and commercial magnetism of a best selling series title.
TIP! When selecting a "series" title, try to select a title which is coined, arbitrary or suggestive – not one that is highly descriptive of your book’s contents. Arbitrary or suggestive words make better trademark candidates than highly descriptive titles. Highly descriptive series titles are not given automatic trademark status, although, marketing people tend to prefer descriptive titles for obvious reasons. Over time, descriptive titles must develop secondary meaning to enjoy protection. Secondary meaning is the connection in the mind of a consumer between a mark and the provider of those services.
b. Not All Titles Can Are Protected by Trademark Law.
Unlike series titles, titles of a single work, whether a book, periodical, song, movie, or television program, normally, will not be protected under either trademark or unfair competition law. This is one of the quirks of trademark law. To quote the USPTO, “Regardless of the actual relation of the title to the book,” courts treat all single title works as "inherently descriptive" at best and "inherently generic" at worst – unless the single title has had “wide promotion and great success.”
Tip! If today's single title is likely to grow into a series of books tomorrow, consider filing an "intent to use" application with the U.S. Patent and Trademark Office. An "ITU" application allows you to file a "Statement of Use" within 36-months of official approval of your application. By filing an intent to use application, you benefit from the earlier filing date. In trademark law, who came first counts for a lot!
CASE & COMMENT: When McGraw-Hill, publishers of the best selling PT-109: JOHN KENNEDY IN WORLD WAR II , moved to enjoin Random House from using the title JOHN F. KENNEDY & PT-109 on a competing book, the court found that two terms in plaintiff's title -- "PT-109" and "John F. Kennedy" -- were descriptive or generic terms, and therefore unprotectable. Noting the inherent weakness of plaintiff's title, the court commented that the words chosen by Random House were an apt description of its book, and therefore in the public domain. Rejecting plaintiff's unfair competition claim, the court further noted that because of the weakness of plaintiff's title, combined with the differences in the overall look and feel of the two books (including Random House's prominent use of its distinctive logo on the spine and back jacket) there was no likelihood of confusion. McGraw-Hill Book Company v. Random House, Inc., 32 Misc. 2nd 704, 225 N.Y.S.2d 646, 132 U.S.P.Q. 530 (1962).
As the McGraw-Hill case shows, neither priority in time, nor significant sales alone will determine whether the title of a book has achieved secondary meaning. Secondary meaning comes gradually and can be defeated altogether when the words chosen are merely descriptive of the contents of the work. Similarly, secondary meaning can be lost through extended periods of non-use (after two years of non-use there's a presumption of abandonment), or diluted by permitting third-parties to use similar titles.
c. Parody Titles Sometimes Protected
As long as anyone can remember, parody has been an acceptable form of social criticism. However, sometimes poking fun can is no laughing matter; at least as far as some courts are concerned.
The problem with parodies in general is that there is no bright-line test to determine what constitutes a permissible parody, which drives home the point that trademark law is complex. Humor is not an ironclad legal defense to either copyright or trademark infringement -- or for that matter libel. For instance, while a florist's use of the slogan THIS BUD'S FOR YOU in an ad for fresh flowers was held by one court not to infringe plaintiff's well-known beer slogan (Anheuser-Busch v. Florists Assn. of Greater Cleveland, 603 F. Supp. 35 (ND Oh 1984)), the use of the phrase WHERE THERE'S LIFE . . . THERE'S BUGS for a combination floor wax/insecticide, was determined by another court to infringe the very same trademark. Chemical Corp. of America v. Anheuser-Busch, 306 F2d 433 (5th Cir. 1962).
Although commercial identity confusion is the most common form of trademark infringement, a noncompetitive mark can also violate a famous owner’s trademark by diluting the distinctiveness of the owner’s trademark. Thus, Barbie’s Playhouse for the title of a pornographic website was held to tarnish Mattel’s Barbie for toy dolls. Mattel Inc. v. Jcom Inc., WL 766711 (S.D. N.Y. 1998) . Just to confuse matters, in Lucasfilm Ltd. v. Media Market Group, Ltd., 182 F. Supp. 2d 897 (N.D. Cal. 2002), the court held that a pornographic movie entitled STARBALLZ was a permissible parody of Star Wars, and not barred under the Federal Trademark Dilution Act.
Fortunately for literary authors, the courts have placed some First Amendment limits on the rights of trademark owners. For example, in General Mills, Inc. v. Henry Regnery Co. (421 F.Supp. 359 (N.D.IL. 1976)), the owners of the "Betty Crocker" trademark sued a well-known comedian over a spoof entitled MOREY AMSTERDAM'S BETTY COOKER CROCK BOOK FOR DRUNKS. The book, which featured the "Betty Crocker" trademark on its cover, also had a photo of comedian Morey Amsterdam pouring alcohol over a salad. Since the test of trademark infringement is likelihood of confusion, the case turned on whether the public would believe that plaintiff, rather than defendant, was the source of defendant's book. While noting that both plaintiff and defendant published books (a fact tending to support a finding of likelihood of confusion), the court held there was no confusing similarity because the comedian's name appeared prominently in the title, and his photo on the cover, serving as a prominent disclaimer. The takeaway from this case, is that the clear, bold, and prominent use of your own title (or in this case, name and likeness) can diminish the likelihood of confusion to acceptable levels.
Similarly, in Cliff Notes, Inc. v. Bantam, Doubleday, Dell Publishing (866 F2d 490 (2nd Cir. 1989)), a U.S. Court of Appeals rejected an argument that a "Spy Notes' " parody of "Cliff Notes" study aids was confusingly similar to "Cliff Notes''" the well-known study aids. Aside from adopting a cover, title and format similar to the "Cliff Notes" format, "Spy Notes" lampooned a number of contemporary titles and authors in "Cliff Notes" form. Despite defendant's profit motive, the court classified the parody as "artistic expression" worthy of constitutional protection.
Margaret Domin, in a law review article, perhaps, said it best, “A non-infringing parody is merely amusing, not confusing. A “true” parody will be so obvious that a clear distinction is preserved between the source of the target and the source of the parody.”
d. Use of Famous Names in Titles
Unauthorized Biographies: The First Amendment is the patron saint and protector of unauthorized biographies. Consequently, a well-known person cannot stop the use of his or her name in the title of an unauthorized biographical work solely on trademark precepts. The protection of the right of free expression is so important that even where a right of publicity is recognized (the right to commercial uses of one's name and image), the public's right to know what prominent people have done or what has happened to them is generally indulged.
However, authors do not have the unbound freedom to make use a famous person's name or likeness in a title for commercial purposes. For instance, while an unauthorized bio of the late film star Keith Leger entitled "Keith Ledger: The Unauthorized Biography" is permissible, you can't publish a "Keith Ledger Cookbook" without the permission of late star's estate. The general rule is that as long as use of the celebrity's name is a literary or expressive use (i.e., primarily editorial), and not a disguised advertisement for the sale of goods or services (e.g., cookbooks), permission is not required.
Caution! While the use of a celebrity’s name in the title of an unauthorized biography is generally not considered a violation of that individual’s right of publicity, or trademark rights, authors need to be aware that in the U.S. (and elsewhere) false statements of facts, the result of shoddy journalism, can give rise to false light and libel claims.
Artistically Relevant Use of Celebrity Names: Provided a celebrity's name has some reasonable "artistic" relationship to the content of the work, and is neither "explicitly" misleading, nor a thinly veiled commercial advertisement, the slight risk that the celebrity's name might implicitly suggest endorsement or sponsorship, may be outweighed by the public interest in free expression. For instance, the song "Bette Davis Eyes," and the film "Garbo Talks," are good examples of protected uses of well-known individual's names used in an "artistic" manner.
CASE & COMMENT: Eminent filmmaker Federico Fellini's 1986 satire, GINGER AND FRED, concerned two retired small-time dancers who were known as "Ginger and Fred" because they used to imitate well-known dance duo of Rogers and Astaire. When Ginger Rogers learned of the film, she claimed her right of publicity had been violated, and that the movie falsely implied she endorsed the film -- a violation of Section 43(a) of the Trademark Act. Affirming the trial court, the Second Circuit Court appeals held that where the title of a film is related to the content of the film, and is not a commercial advertisement for goods and services, the First Amendment's interest in freedom of expression will outweigh a well-known individual's right of publicity. The court further held that where a celebrity's name has at least some artistic relevance to the work and is not "explicitly" misleading, freedom of expression concerns will generally outweigh the likelihood of public confusion over the source of the work. Rogers v. Grimaldi, 875 F2d 994 (2d Cir. 1989).
The Rogers' case acknowledges that books and movies are hybrid by nature -- a combination of art and commerce. While consumers have a right not to be misled, the "expressive element" of a title may make it predominantly noncommercial, and thus deserving of more protection.
How to Avoid Costly Trademark Battles
Look before your leap! It's always been sound advice. Prior to launching a new series or publishing company, conduct a preliminary search to ascertain if your mark is in conflict with someone else’s mark. Bear in mind, marks do not have to be exactly the like in sight or sound to be cause trademark confusion. Sometimes referred to as "knock out" search, a screening search should include a review of state and federal trademark databases, industry directories and, of course, the internet. Similar marks used for closely related goods or services are what you need to consider. If there are no clear conflicts, retain a trademark attorney who will order a professional search report. The trademark attorney will then provide you with an availability opinion. Failure to do a thorough search, or to properly evaluate a search report, puts you at great risk. The consequences of not searching, could include a court order demanding the destruction of inventory, monetary damages, and, general business disruption.
Trademark Licensing Rights: Optimizing Non-Book Income Streams
If you are an author, before signing your book contract, ask yourself whether your book has commercial licensing potential? As a matter of course, most publishers will seek merchandise licensing rights, but very few will fight you if you wish to retain these valuable rights. If you are represented by a literary agent, and the contract he or she has obtained for you contains a grant of merchandise licensing rights, likely, you are not well represented. Can you rely on your literary agent to guide you properly? It all depends. There are many honest, contract savvy agents out there. However, be vigilant. Once you move beyond the AAR certified agents, you enter a pool of author representatives that includes both stellar agents and predatory practitioners. Read and understand what’s put in front of you. Ideally, hire an attorney to review both your agency agreement and publishing agreement. Unlike agents, attorneys are licensed, and have an undivided loyalty to the client. Are there bad attorneys? Of course. Buyer beware.
Summary
Step 1: Check the availability of the mark you wish to adopt.
Step 2: Have an attorney conduct a full trademark search.
Step 3. Apply for federal (and state) trademark protection.
(c) 2010. Lloyd J. Jassin
DISCLAIMER: This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.
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Co-author of The Copyright Permission & Libel Handbook (John Wiley & Sons)
Lloyd J. Jassin provides counseling to book publishing, television, theater, new media, arts and entertainment clients on contract, licensing, copyright, trademark, unfair competition, libel, right of privacy and general corporate law matters. His practice includes drafting and negotiating publishing and entertainment industry contracts, intellectual property due diligence, trademark prosecution, dispute resolution and litigation. His expertise in intellectual property and organizing business entities, has enabled him to represent clients throughout their growth cycle. Besides individual and corporate clients, he also represents trade and industry groups such as the Audio Publishers Association (APA) and Publishers Marketing Association (PMA). Mr. Jassin has achieved national prominence with his book, The Copyright Permission and Libel Handbook (John Wiley & Sons), coauthored with Steven C. Schechter.
More information about the author may be viewed at http://www.copylaw.com/aboutus.html
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