9 out of 10 Attorneys Recommend… Examining Intellectual Property in Your Advertising

Every business needs advertising to attract customers. Advertising can be a minefield for the unwary, however, unless potential Intellectual Property (IP) issues are identified and resolved well before an ad goes to print or is broadcast on the airwaves. This article provides a brief overview of just some of the IP considerations involved in advertising, including issues relating to trademarks, trade dress, copyrights, rights of publicity, and false advertising.

Trademarks

Before using a new trademark or service mark in an advertisement, the prudent advertiser makes sure the mark is clear for use. No one wants to invest significant time and money in an ad campaign for a new product only to find out too late that the product trademark allegedly infringes someone else’s rights. Accordingly, a clearance search and analysis can identify potential risks of adopting a mark before starting a new branding initiative. Once a mark has been cleared for use, applying for federal registration will maximize the scope of its protection, which may be particularly worthwhile for any mark important enough to justify a substantial advertising budget.

The prudent advertiser also uses marks properly. Proper use entails using a mark as an adjective preceding a generic noun and highlighting the mark relative to surrounding text, such as by using all-caps, a stylized, bold, and/or different color or size font, or at least capitalization of the first letter of the mark (i.e. REX™ dog biscuits). Misusing marks has caused many marks to become generic over time, including the terms escalator, aspirin, cellophane, thermos, and pilates. 

Each ad should also contain the mark used at least once with the appropriate symbol to provide notice of rights — ® for registered trademarks, ™ for unregistered trademarks, and SM for unregistered service marks — or include a statement at the bottom of the ad that “[Mark] is a [trademark, registered trademark] of [owner].” Failure to provide notice of registration for a federally registered mark can impact the award of damages in the trademark infringement suit. 

Ads should be free of infringement or misuse of marks owned by others, and use of another’s mark should either be with explicit permission or permitted under the principles of fair use. For example, it is permissible fair use for a retailer of a product to use the product trademark to refer to the product being sold. Where an ad refers to a third party’s mark, however, it may be necessary to identify who owns the mark. 

Trade Dress

Trade dress is the non-functional physical detail and design of a product or its packaging, which indicates or identifies the product’s source and distinguishes it from the products of others. Trade dress may include, for example, product configuration, packaging for a product, or the overall look and feel or theme of a service establishment, such as a restaurant. The trade dress of a product or service may therefore figure prominently in advertising for the product or service. An advertiser may want to make its product stand out from the crowd, or in some cases, such as for store-brand competition of branded products, may want the package to closely resemble the competition. When comparing elements of trade dress in an infringement lawsuit, a court looks at the trade dress as a whole, not at any single element. 

From the standpoint of designing and promoting new and original trade dress that is difficult to copy, choose at least some elements that are unique or arbitrary, as opposed to elements that are descriptive of the product/service or commonly used by others in the field. To more rapidly establish secondary meaning (i.e. where consumers associate a particular feature with the source of the goods) in the most important elements, consider using “look for” advertising (i.e. “look for REX® dog biscuits in the doghouse-shaped box”). To avoid packaging being found confusingly similar to that of a competitor, use your own identifiable marks prominently. Where packaging necessarily has elements that are similar to those of competitors (such as photos showing suggested uses for the product), make sure the arrangement of the various elements is distinguishable from that of the competitor. Furthermore, avoid copying elements of a competitor’s trade dress that have secondary meaning.

Copyrights

Copyrights protect “original works of authorship” fixed in a tangible form of expression. Copyrights do not protect ideas, titles, short phrases or slogans. For example, copyrights protect photographs and copy used in print ads, the audio presentation in a radio ad, and the audiovisual features of a TV commercial. Copyrights do not protect the underlying idea in an advertisement. Determining what will be considered protectable or not protectable can be very fact-specific. For example, one court found that elements in two photos, each of a business person considering leaping from a building, were unprotectable, because any similarities between the two images were dictated by the subject matter. Another court found that aspects of two photographs, each of a man wearing a t-shirt and a lot of jewelry, were protectable, and left it to a jury to determine whether the photos were substantially similar.

After identifying material that can be protected under copyright, it is next necessary to determine who owns the rights in the work. Some aspects of the work may be in the public domain or the user may have an implied right to use the work. For example, a retailer typically may have an implied right to use an image of a product to sell the product. In general, if a work is created by an employee within the scope of his/her employment, it is considered a “work-for-hire,” in which the rights in the copyright vest with the employer. If the work was prepared by a non-employee, the work will typically not be considered a work for hire, absent a specific contract term. Therefore, prior to preparation of advertising content (photos, jingles, mascot costumes, ad copy, etc.) by non-employees, advertisers wanting to own the copyrights for such content should have written contracts containing specific work-for-hire provisions. 

If an advertisement uses a pre-existing work (such as a song written and/or performed by another), the advertiser likely will need a license or assignment of rights to use the work, unless the work is in the public domain or the use can be considered “fair use.” Because copyright rights, in most cases, are enjoyed for the life of the author plus 70 years, only very old works, or works for which copyright rights were not properly preserved under prior law, are currently in the public domain. Fair use depends upon how much of the work is used and the purpose of the use. Parody is one type of fair use. Accordingly, a movie advertisement for Naked Gun 33 1/3, which included a photograph of actor Leslie Neilson’s head superimposed on the body of a naked, pregnant women, was held not to infringe the copyright owned by Annie Leibovitz for a famous Vanity Fair magazine cover featuring actress Demi Moore in a similar pose, because the ad was deemed to be a parody. 

Copyright licenses take into consideration factors such as how much of the original work will be used, the way in which the work will be used, whether the work will be changed in any way, how often the work will be reproduced, distributed and/or displayed, the amount of time the work will be used, whether the licensed rights will be exclusive or non-exclusive, and the jurisdiction of use.

Copyright considerations extend not just to the main focus of a photo or video, but also the background images or material. For example, does a photograph used in an ad show in the background a work of art or the recognizable trade dress of a restaurant? If so, the advertiser may need to secure the right to show the background work in the ad, or it may want to remove or obscure the background work using photo editing techniques.

Rights Of Publicity

Any ad that features a person’s image, voice, signature, name, photo, or likeness, as the focus of the ad or even in the background, may involve rights of publicity. Key considerations are whether the person is recognizable and whether the characteristic of the person used in the ad has commercial value. For example, singers Bette Midler and Tom Waits have both recovered damages from advertisers who used voices that sounded like theirs. Vanna White and Woody Allen have both recovered damages from advertisers whose ads featured lookalikes (or, in White’s case, a robot that looked and acted like her). In other cases, however, non-celebrities have failed to recover on the basis of right of publicity, where their likeness was not found to have any commercial value. Securing rights protected by rights of publicity typically requires a license from the owner of the rights. 

Rights of publicity also depend upon whether the owner is alive or deceased and what state’s law will govern. Certain states have statutes that set forth rights of publicity, whereas other states protect such rights only under the common law. Only some states, either by statute or under common law, recognize a postmortem right of publicity. Thus, consultation with counsel in the relevant jurisdiction may be important to understand the applicable rights of publicity. 

False Advertising

Advertising that is untrue or materially misleading can expose the advertiser to a false advertising claim. False advertising can arise not just if a statement is literally and explicitly false — such as a false suggestion of geographical origin that something is “Made in the USA” that is not — but also if the advertising contains necessary implications that are false. For example, a pharmaceutical manufacturer that advertised a product as “Night-time Strength” was found to have falsely implied that the product was especially effective for night-time use, where the advertiser had no evidence of such effectiveness. 

A false dramatization may also lead to false advertising liability. For example, the maker of plastic bags whose ad showed a goldfish in a competitor’s leaking bag was found to have falsely dramatized the ineffectiveness of the seal on the competitor’s bags, where only a very small percentage of the competitor’s bags actually experienced such leakage. A false advertising claim can also arise if a photograph of a competitor’s product is shown in an ad and represented to be the advertiser’s product.

Even if literally true, a misleading statement may be considered false advertising. For example, a misleading implication of official event sponsorship, a statement that presents less than the whole truth, or even a statement that is supported by valid test results, but for which the test does not support the advertising claim, may subject the advertiser to liability. For example, a motor oil manufacturer’s ad claiming its oil protected better at start up than another leading motor oil was found to have engaged in false advertising, because, while tests indeed showed that the defendant’s oil was quicker to reach engine parts, the advertiser had no proof that this quickness translated to reduced engine wear (i.e. better protection). 

Only false or misleading statements relate to the inherent quality or characteristic of the product or that are likely to influence the purchasing decision are considered material enough to create liability. For example, in one case, a statement that a certain type of clothing contained cashmere was considered material, whereas in another case, a statement that basketball scores were reported “straight from the arena,” when the scores actually came from a public source not within the arena, was considered immaterial because consumers only care about receiving accurate scores, not how the scores were collected. 

Statements that constitute exaggerated boasting or a general claim of superiority that is so vague that consumers will understand it as merely an expression of opinion are considered “puffery” (e.g. “Worlds Best Coffee”; “America’s Favorite Pasta”). Puffery is not actionable, but if a statement contains specific and measurable claims, such as “longest ball on tour” for a golf ball or “longer engine life and better engine protection” for a motor oil, then the statement may be subject to a false advertising claim if a competitor can show that the statement is untrue. For a claim that the advertised product is better than another, a competitor who can show that his product is equal or better would be successful in bringing a false advertising claim. For a claim that “tests prove” that the advertised product is better, a competitor who can either show that the test results are false or that the test is insufficient to prove what it is alleged to show, would be able to successfully bring a false advertising claim. 

Conclusion

The bottom line is to be on the lookout for potential IP issues in each and every advertisement. From including work-for-hire clauses in contracts with ad agencies or content providers, to reviewing ads for proper trademark use, to considering whether any of the elements in an ad require licensing or whether any statements could lead to liability for false advertising, the best practice is to review IP issues in advertising as early and as often as possible. RatnerPrestia attorneys are standing by and ready to assist!

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