Disclaimer: the following is provided for informational purposes only and is not intended to, nor does it constitute legal advice. Every situation is different and requires an in-depth analysis of its specific facts and circumstances. If you have questions about the subject of this post, make sure to consult with a licensed attorney, knowledgeable in this area of the law.
So you’ve started a business and you’re ready to put your goods or services out there for the masses. Congratulations! You’ve probably also heard that you need to protect your intellectual property rights, right? So you’ve covered ownership of copyright and allocations of rights to use in your contract and you’re using the “®” or “™” symbol. You’re good to go, right?
Wait: are you really sure you know what these rights are and how they are established? Don’t worry if you’re not quite sure: it’s a complicated topic and most people aren’t sure exactly how each works! So here’s a quick rundown on the difference between copyrights and trademarks, and how each is established and can be used.
First, let’s talk copyright. Copyright is a form of protection, based on the U.S. Constitution, and granted by law for works such as literature, drama, music, and artistic works including but not limited to stories, paintings, photographs, songs, software, architecture, and movies. These works must be fixed in a tangible format (handwritten, typed, .jpg/.nef, recorded, etc.). You cannot copyright an idea that exists only in your head.
Copyright attaches at the time the work is created and fixed in a tangible form (including digital images). Photographers, as you’ve probably heard, copyright is created and attaches once you press the shutter and image is recorded on your memory card. You own the copyright and you don’t need to register your work to retain that copyright.
Until relatively recently, the longstanding rule was that, although your copyright exists whether or not you register your work, the work must be registered to bring a copyright infringement action. In 2010, the U.S. Supreme Court held that the registration requirement is a non-jurisdictional pre-condition to bringing an infringement lawsuit. Reed Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237, 1247 (2010). Unfortunately, the Court declined to decide whether registration is mandatory and/or what happens when a party tries to bring an infringement action regarding an unregistered work. So what does this mean for you? It means that, to the extent you want to pursue a copyright infringement cause of action, you need to, at the very least, pre-register your work before bringing the action. To the extent you are successful in your infringement action regarding a work that was registered within three months of creation, you may also be entitled to statutory damages and attorneys’ fees. This is huge, because in many cases, it may cost you more in attorneys’ fees to pursue an infringement action than you stand to recover in damages alone. Side note: the Digital Millennium Copyright Act provides an exception to the three-month rule and may allow for recovery of legal costs regardless of when the work was registered.
If you do need to pursue an infringement action, in order to succeed, you must prove that: 1) you own a valid copyright; and 2) the infringer has copied constituent elements of the work that are original. In addition to being able to bring infringement actions, receive statutory damages, and your attorneys’ fees, federal copyright registration serves as conclusive evidence of your ownership of the copyrighted work, which means you don’t have to go to additional lengths to prove element number 1. Hooray!
So what happens if you find out someone is copying your work, but your work is not registered? Fear not – you still have remedies at law. You can file an action with the court requesting an injunction. An injunction is an order that, in this case, prevents the other individual from using your work. You may also have claims for conversion (this is similar to theft, but is a civil action, rather than criminal). As always, if you find yourself in a situation where you believe someone is wrongfully using your work, it’s best to consult with an attorney knowledgeable in this area of law.
Remember that not all use of your work is actually an infringement of your copyright. There are four “fair use” factors to keep in mind, and which may allow a would-be infringer to avoid consequences. These factors are:
- Purpose and character of use. How is the party claiming fair use using the work? Is it for commercial purposes or nonprofit educational purposes? Courts will balance the purpose and character of use against the remaining factors. Additionally, if the work is “transformative,” it is more likely to be considered fair (has the user added something to the work? Does s/he mean to substitute the transformed work for the original use of the work?).
- Nature of the copyright-protected work. Use of an unpublished work is less likely to be considered fair use than use of a published work. Similarly, use of highly creative work is less likely to be considered fair use than use of factual work.
- Amount and substantiality of the portion used in relation to the entirety of the work. Courts will look at the quantity and quality of the copyrighted material used. If the user has used all or substantially all of the copyright-protected work, the court is less likely to consider the use fair than if the user used only a very small portion of the work.
- Effect of the use upon the potential market for or value of the copyright-protected work. Courts will look to whether the unlicensed use harms the existing/future market for the original work.
As a final note on copyright, remember that you may retain copyright but grant your clients a license to use the work. These grants should be carefully drafted to ensure that you preserve your copyright, but effectively grant the client the license you and the client agreed upon. Make sure to have these provisions of your contract reviewed by an attorney!
On to trademarks! A trademark is a word, phrase, symbol, or design (or a combination of these) that identifies the source of goods or services and distinguishes them from another. Federal trademark registration is not required and you may establish common law rights in your mark based on use of the mark in commerce, for example, continuously using the same logo on all your branding and advertising material.
So if federal registration is not required, why should you register your mark? Federal trademark registration provides several advantages over common law rights, including: 1) legal presumption of ownership and exclusive right to use it; 2) public notice of your claim of ownership of the mark; 3) listing in the USPTO’s online database; 4) ability to record the US registration with US Customs and Border Protection to prevent importation of infringing goods; 5) the right to use the federal registration symbol (“®”) (yes, you read that right” you cannot use the “®” symbol if you have not federally registered your mark!); 6) the ability to bring an action concerning the mark in federal court; and 7) the use of the US registration as a basis to obtain registration in other countries.
While it’s relatively simple to establish your trademark, it’s important that you “police” it, as well. Failing to police and enforce your mark over time may cost you your trademark: if someone begins using it and you do not attempt to stop their use, they may acquire rights in the mark over time!
In addition to federal registration, states also offer trademark registration. In Montana and Arizona, state-level registration is available through the states’ Secretary of State websites. State-level protection allows the owner of the mark to enforce the mark within the state, but not outside of it.
So what should you consider when selecting your mark? First, consider the likelihood of confusion with other marks. This exists when the marks are similar and the goods/services are related in a way that could cause consumers to mistakenly believe the come from the same source (for example, The Daily Grind for an espresso stand and Daily Grind for bottled cold-brew coffee available in the grocery store: the names are nearly identical and the products provided by each are similar enough that people could easily believe they are produced by the same company).
Additionally, you’ll want to consider the strength of your mark. Marks fall into one of four categories, in order of strength. The strongest mark is “fanciful and arbitrary:” it does not provide any insight into the goods or services associated with the name (for example, “Bell Co.” for insurance services). The second strongest mark is suggestive: it hints at the goods or services provided, but is still unique (for example, “Tastes Great” for pre-made pizza crust). The third strongest mark is descriptive: it explicitly indicates the nature of goods or services provided (for example, a picture of a bike for bicycle repair services). This mark cannot be registered until it acquires distinctiveness through long-term use. Finally, the weakest mark is generic: although it might make clear the nature of goods or services provided, the word itself is so generic that it cannot be registered (for example, “Bicycle” for a bike store). The strength of your mark will affect both your ability to register the mark and enforce your rights in it.
Ultimately, copyright and trademark protection offer two different and valuable types of protection in your business, but it’s important to understand how they operate and what exactly the rights mean so that you can properly enforce them. If you have questions, feel free to shoot me an email at email@example.com!