By Chuck Knull
Making your company’s products or services appear special and different from the competition involves branding. Branding involves the use of trademarks to identify the source of products. Protecting your brand also requires careful attention to the protection available under copyright laws, as copyright protection can enhance trademark protection.
The Federal Copyright Act protects the “original expression” of an idea or ideas when such expression is “fixed”, that is, when it is printed, painted, recorded or filmed. The ideas themselves are not protected by copyright.
Anybody making or marketing consumer products must seriously consider registering copyrighted material such as the text and illustrations of a web site, posters, print advertising, website videos, infomercial recordings, the labels on the goods and its packaging, and any instructional or informational material packed with products or offered as handouts.
The owner of a copyright has the right to prevent (by injunction) others from copying, distributing and otherwise using the copyrighted material. If the copyright owner has made a timely filing of an application for registration of the material with the U.S. Copyright Office, the copyright owner can also recover “statutory damages” (in practice, a form of punitive damages) and its own attorney fees from the infringer. Thus, as a simple infringement might not carry much in the way of monetary damages with it, a person who makes timely registrations of its material can make it extraordinarily costly for anyone to copy such material.
Since people bent on borrowing a company’s good will by trading on another’s trademarks ordinarily don’t mind also borrowing packaging, web site text, or instructional inserts. Why do the work when it is so easy digitally to copy? Having registered copyrights, combined with a trademark infringement suit, can obliterate such an infringer. An application for copyright registration is a simple document to complete, can be done on line, and the government filing fees start is only $35.00. Few protective actions are as cost-effective and simple to do.
For example, Company C owned the trademark registration for MIGHTY GOAT for a very successful goat milk soap made with the milk from our famous Catskill goats that bodybuilders can use to wash the oil off their bodies after competition. It has also registered the wrapper design and the product information sheet of its product at the U.S. Copyright Office. Company Y comes out with a competing soap called MIGHTY SHEEP that it claims is “compare to MIGHTY GOAT.” Company Y also copies the text of Company C’s product information sheet inserted in the product box. A court finds that using “compare to MIGHTY GOAT is permitted even though Company Y’s soap has sheep milk in it. But it also finds that the product information sheet was a copyright infringement, and awards the owner of MIGHTY GOAT statutory damages of $100,000 plus its attorney fees (no small sum, since it had laid out $40,000 to its lawyers.) On the hand, if Company C had not timely registered its copyright. All the Court can award in this situation is actual damages of $100 for the reasonable licensing fees for the infringing information sheets. No attorney fees.
A couple of examples from my real life practice also show how this works.
A while ago, I had a client discover that photographs of its products were appearing on another website that was offering the products at substantially reduced prices. We could not be sure if the products were actually sold there, or whether the website used the products as a “bait and switch” and would ship substitutes if my client’s were ordered. The business did regularly register copyright in its website including such photos, so we were able to get the photos and the products taken off. The fact that we had the registrations acted a sledgehammer to make our point. Had we not had it, the pictures might still be up. The fact that the materials were registered for copyright before the commencement of the lawsuit made any fight by the infringers a bad tactic as it stood to pay all its own legal fees and also fund our legal fees during such fight.
On the other hand, I also helped a client who had been wrongfully sued for copyright infringement by a software program owner who claimed that the client was using its program without a license and thus infringing copyright. The program owner claimed that its was owed statutory damages and its attorneys for this infringement, but we were able to establish early in the case that the program owner had not applied to register the copyright until right before it brought the law suit. We convinced the judge to knock out the claims for these extra penalties in a summary judgment motion, which left the program owner with a small claim for lost license fees. When it could not prove any infringement at trial, our client was vindicated. However, had the program owner actually registered its copyright at the right time, my client might have been forced to settle for a large payment rather than fight the case and risk not convincing the court that it had not infringed.