Legal Issues Surrounding Branding: Branding and the Law |
|
A brand is the cutting edge of the corporate identity. It may be the only part of a marketing effort that breaks through to customer, and it is absolutely necessary that it breaks through cleanly. Although the rest of this book discusses how to create a brand, this chapter looks at how to protect it as a corporate asset. After all the effort to create a brand, it would be a shame to lose your work because of the actions of someone else. In many cases, legal help will be necessary to interpret your specific situation. However, this chapter should give you the general idea.
In the days of the old American West, branding quite literally meant to burn a logo into your product (cattle). It separated your product from the herd. Your brand did not need to be artistic or even original. It only had to be unique to your cattle. Today, trademark law has the same goal. The goal is to make it clear to all which product comes from which supplier. A proper appreciation for trademark law helps to protect your branding effort and those of your competitors.
19.1 INTELLECTUAL PROPERTY
Television lives on intellectual property—intangible products produced enterprises of the mind. Although we may understand the essentials of copyright, other forms of intellectual property are more difficult. There are four classes of intellectual property. A full discussion is a book in itself. Although the rest of this chapter will look at trademark, there are three other types of protections that may impact branding.
19.2 INTELLECTUAL PROPERTY PROTECTION
Copyright protects an expression, not just an idea. Original artwork or copy can be protected by copyright. Copyright protection is enforced when the work rises to the level of a unique expression of an idea, concept, or work of art. Most brands, slogans, and trademarks are usually too small to rise to the level of copyright protection. It is difficult to argue that “tri-state news leader” is not just an idea.
Normally, we think of patents protecting inventions created in the back room of a laboratory. However, a design patent is possible on the specific product. Design patents are normally assigned to items such as silverware or the “look” of a tangible product. A station promotion simply would not qualify for this level of protection.
Trade secrets include information that is not generally known or shared. All proprietary data, processes, and some databases (such as contact lists) may be protected by trade secrets. The main purpose of trade secrets is to keep an employee from leaving your company and taking essential elements of the business with them. An overall brand strategy may be considered a trade secret but not the logos or slogans.
19.3 INTENT OF LAW
The protection of intellectual property is split between creative and business considerations. Copyright and patent protections are designed to encourage creative activity. These policies give the creator powerful control over products. The focus of the law is on the product. The controlling legal question is “Who created the product and when?” Generally, the first person to create a product gets the exclusive right to profit from it.
Trademark and trade secrets regulate the business relationship. Instead of protecting unique ideas, the goal is to protect businesses from each other. The controlling legal question becomes “Are profits lost or customers deceived?” If the answer is “no,” almost everything else should become a non-issue.
Creativity is not protected as much as business investment in these “business protection” statutes. The underlying assumption is that competition works best when customers are clear as to the source of products. Two people can not patent the same process; however, two people can use the same brand image as long as they do not interfere with one another.
Because the value of trademarks is driven more by market forces than inherent value, protection is more of an art than an assurance. The person wishing to protect a mark should consider several factors, including functions, strength, and registration of the mark. Together these factors can determine the effectiveness of your protection.
19.4 USE OF A TRADEMARK
The trademark is used to distinguish your station in the market, indicate source, and represent goodwill. A violation will mislead the public and interfere with any of these functions. How do the stations in your market distinguish themselves from one another? Although you are not locked in to this history, it helps to show your goodwill or others’ attempts to deceive. In some markets, the stations may present themselves in distinctly different ways from each other. In others, the stations may have a very similar pattern of promotion. Historically, the courts assume people will see and understand the real differences when it is part of the tradition in that market.
Pay particular attention to branding protections during periods of network switches in the market. Branding can become a problem and is more important at these times. Consumers do not understand the difference between network and syndicated programming. In addition, some stations may hold ill-will over the changes and thus attempt to mock, block, or confuse the audience moving to a competitor.
Goodwill is the real point of branding. If another station is using your goodwill to sell their product, that may be a violation of your trademark. This does not necessarily stop a person from making fun of you or your product, but it does stop them from diverting your work into their product.
19.5 “WHAT” MARK?
There are three related categories included under the broad concept of trademark. Strictly speaking, “trademarks” are names for tangible products only. For example, Ampex has a trademark on its brand of video tape. Because television stations provide an intangible service, their brands are protected as a “service mark.” In the United States, there is virtually no difference in the protection provided. Internationally, you may see a difference.
A corporate name, such as WXXX, Inc., can be protected as a “trade name.” The essential difference is that the trademarks (service marks) describe your product—not all broadcasting but Cosmos Broadcasting. Trade names are more inclusive. Thus, it is easier to protect Cosmos Television than Cosmos, Inc. This is especially true when the trade name has literal meaning. NBC is easier to protect than National Broadcasting Company.
A corporation my have all three. Ampex, Inc. may provide Ampex video tape and Ampex Duplication Services. The company is protected by trade name. The tape is protected by trademark and the service by service mark. Except for a lesser protection given to trade names, the concepts are pretty similar. In this chapter, trademark is used as a generic.
19.6 STRONG VERSUS WEAK MARKS
As discussed above, some names are easier to defend than are others. The relative ability of a brand to be associated only with a corporation is called the strength of the brand. For example, Kodak is a strong trademark because it has no meaning outside of the product. Center City Television, on the other hand, is simply descriptive. Customers may know the company but the mark is harder to defend. The new company Center City Radio may successfully argue that it does not infringe on the earlier trademark.
You may think of trademarks as a continuum from strongest to weakest:
Fanciful names are those words devoid of meaning outside the company, such as Kodak or Polaroid.
Arbitrary names have meaning but not meaning associated with the product, such as Touchstone or Apple.
Suggestive names have meaning somewhat associated with the product, such as the Storm Team or Weather Friends.
Descriptive names simply state what the product is in simple terms, such as Mississippi Broadcasting or the Six O’clock News.
Generic words, channel 6 or television, can not be trademarked by themselves.
A weak trademark can still be defended. It is just harder. The company must show that they have invested in the name and that the name has acquired secondary meaning in the public. If you are using Storm Team, for example, it is a fairly weak trademark. You must show that your audience understands that the Storm Team is on channel 6 and the Weather Friends are on another channel. Weak trademarks will also face greater challenges if the company wishes to extend the brand to a national or international market. For example, “Southwest Broadcasting” may have problems from “Southwest Airlines.” The Federal Register of Trademarks may reject a trademark outright that is too weak.
Television stations are in a unique position. The very descriptive name WXXX-TV 12 can still be fanciful. Normally the call letters are unique in the public’s mind. A problem arises when a new station takes on call letters similar to a station already in the market. KLBP may be forced to defend its name when KBPL enters the market. The Federal Communications Commission (FCC) stopped negotiating these disputes in the 1980s. Now, it is simply a trademark matter. Stations should be vigilant as new competitors enter the market.
19.7 SLOGANS
Unique names and slogans receive the same trademark protection as logos and should be defended just as carefully. Disputes may often arise over slogans and jingles. Slogans are too short for effective copyright protection. Even if you could copyright “Eyewitness News,” a competitor would have equal reason to copyright “Your Witness News.” Trademark protection steps in to protect slogans the same as logos.
With slogans, you must go back to why we have trademarks in the first place. Trademark law does not give ownership rights, just exclusive-use rights. There is no problem with 100 Eyewitness News stations in this country, but there is a problem with two in one market. Even if you buy your promotion package from a national distributor, you may have a problem if it tends to confuse the audience.
19.8 DILUTION
A strong brand gives the company that owns it not only an economic advantage but also a legal advantage. The more clearly the audience perceives an association between a trademark and a specific program, the stronger the protection. But as stations start multi-channel broadcasting, they may be tempted to extend their traditional brands into the new services. Thus, brands such as ESPN get extended into ESPN2, ESPN College, or ESPN Oldies. Stations may also dilute their own brand by changing slogans or logo colors. Each time these trademarks are changed, the clock on their use practically restarts. Because older trademarks are stronger than newer ones, the station dilutes it own protection as it dilutes its brands.
In 1996, the Federal Trademark Act was amended to provide federal protection against trademark dilution. As stated above, confusion has always been the standard but this Act provides for owners of famous trademarks to keep people from using their mark in a way that simply dilutes the brand’s identity. The issue here is not so much consumer confusion but a loss of distinction. The basic argument is that these lawsuits protect their corporate image. Before this law, Campbell Soup and Campbell broadcast could both exist. No one was confused. Under the law, a new company named Campbell Broadcasting may be challenged because it dilutes the power of the name Campbell. Because the law is so new, it has not been properly tested. We have yet to see the definition of “famous” trademarks and how powerfully the courts interpret the law.
A disturbing new trend in recent years is a group of aggressive lawsuits claiming brand dilution. Dairy Queen used the technique to discourage a producer from using their corporate name as a movie title (American Dairy Queen Corp. v. New Line Productions, Inc.). Although there was no association between the movie and the ice cream company, Dairy Queen argued that the movie would degrade their corporate image. In even more aggressive cases, the technique has been used as a counter-attack technique. Perhaps the most visible brand dilution case was launched by the Fox News cable channel. Fox claimed that the comic and writer Al Franken (Fox News Network, LLC v. Penguin Group [USA], Inc.) violated its trademark when he used the phrase “fair and balanced” in a book title. The end result was both embarrassing for the cable channel and expensive for the comic.
19.9 SOURCES OF DISPUTE
Although it is more difficult to establish (especially in the fast changing media world), mediated products can be addressed under a larger “trade dress” concept. Traditional trade dress protects the overall look of a McDonald’s restaurant versus that of a Hardees. For example, John Deere defended the use of its unique shade of green as part of its trademark (Deere & Co. v. MTD Products, Inc). Special jingles and characters can have the same effect if they are central to the station’s operation or programming. Even if the station does not own the copyright on a jingle, it may have trademark protection. One can easily imagine several songs that brings a specific program to mind.
Disputes over specialty characters are normally associated with radio. For example, a station may build a promotional effort around the made-up character “Jimmy the Frog,” and a competitive station may be kept from creating a deceptively similar character. These characters result in a confusing mix of trademark and copyright disputes. David Letterman’s switch from NBC to CBS raised disputes concerning some of his specialty characters. Barney, the children’s program, invited an onslaught of purple dinosaur costumes for children’s parties.
Trademark problems may grow in an era of consolidation and multi-channel broadcasting. Broadcast outlets and audiences will face a dizzying array of program sources. The temptation may be for a station to co-brand a programming. For example, if an NBC affiliate co-owns a WB station, the promotions department may be tempted to combine promos. This may make perfect sense to the promotions department and the audience. However, the trademark owners (NBC and WB) may not be so understanding.
19.10 REGISTRATION
The bad news is that trademark registration can be a pain. It is expensive, complicated, and time consuming. In the end, you may not get the trademark you wanted. The good news is that full registration is usually not needed for a local television station. Although it offers additional protections and puts possible offenders on notice, it is not needed to defend your rights. As the broadcast market changes, companies should anticipate the day that they will need national registration—just in case.
The first level of protection comes from simply using your trademark in commerce. A trademark that is used has the upper hand on a trademark that is planned—no matter which was written first. Using your mark gives you common law protection in the geographic area of your station. This means that neither a local nor national company can come into your market to take your mark.
You can register your trademark with your state (or states). The registration may not do you much good, but it does not cost much either. Usually, the state will only check if the identical mark is already registered and add your mark to the database. You may gain certain procedural advantages because it also looks like you’re doing the right thing. State registration may be enough to scare off some competitors or impress a judge. In a tough case, however, it does not mean much.
You can get a strong national protection from federal registration with the U.S. Patents and Trademarks Office. Registration can put others on notice that the mark belongs to you. It increases penalties and gives some international protection and Internet protection. You may also register an “intent to use” for a trademark up to 3 years in advance.
Federal registration can also be expensive. The process can easily take more than a year and cost thousands. You must perform your own search for anyone else using your mark. An overlooked contender to your mark can send you back to the beginning at any time. Professional help is a necessity. Despite the risks, national registration can mean a big payoff if you plan to commit to your mark on a national scale.
International protection is for seasoned veterans and well beyond the space allowed here. It could take a minimum of 3 years. Not all countries recognize international protection and fewer enforce it. It is a step that should not be made lightly or without assistance.
19.11 INTERNET
Local television stations are local by nature and technology. The main reason to consider expanded trademark protection is the Internet. This argument has merit but may be simplistic. Putting your product out on the Internet pushes your product from a regional to international market. If you are going to build a campaign, you want to protect your investment. You may also open yourself up as a defendant by going beyond your normal geographic market.
However, thousands of stations face the same dilemma. Some names will be unavailable—Amazon and ESPN Sportzone, for example. Other names may need to be more specific—Lansing’s Eyewitness News. Litigation is likely but so is compromise. Major questions may start when the American ABC faces direct competition from the Australian ABC.
Competition will depend on how you define your market. Are you really going to market to the whole world or just your region (and expatriates)? Many stations run a telephone information service (e.g., time and temperature). It has a potential world-wide audience but not a practical world-wide audience. The Internet can deliver that audience easier, but is that your audience? It comes back to market confusion. Are people going to confuse your Louisiana service with the one from Canada?
A bigger problem is the products you buy. Can you tolerate your syndicated promo package used by 100 other people on the Internet? Can they tolerate you? Do you have the right in your syndication contract to use it online? Converting product to the Internet means converting it to another media. Do you have the right for non-television distribution? The Internet is an intellectual property quagmire because products sold to you were intended for local distribution. Most syndication contracts were written before the Internet’s explosion of popularity.
Universal resource locators (URLs) have become the center of most disputes on the Internet. These names, most commonly used as Web page and e-mail addresses, are generally allocated on a first-come basis. This has caused WXXX broadcasting to fight with the WXXX corporation for the URL WXXX.com. Beyond normal disputes, cyber-squatters attempt to claim URLs only to resell them to a corporation. Other entrepreneurs claim similar URLs and misspellings of popular URLs. For example, Viacom.com may need to fight the owner of Vacomm.com (without the “i”). To the extent the second URL appears to be the first, a trademark battle may develop.
Finally, protest sites have developed for many corporations. The URL might be WXXXsucks.com. To a certain extent, these sites have been discouraged by brand dilution lawsuits. However, attacking protest sites may have a backlash as the public perceives a rich corporation battling with a poor protester. Further, trademark law is poorly designed to combat free speech (see next section).
19.12 FAIR COMMENT
When Jim Henson decided to add a new character to his beloved Muppets, he pleased everyone but Hormel. The new character, a pig called Spa’am, was not exactly complimentary to Spam, the trademarked product by Hormel. Hormel felt compelled to defend its mark. However, the court ruled in favor of the Muppets because the Muppets use was parody and could not be taken seriously.
As much as it displeases us, we have invited people to watch our product. Therefore, they have the right to comment on its quality. Fair comment is allowed. Many corporations have used trademark law (some successfully) to squash comment. In fairness, the question should be, “Are people deceived by the use of your trademark?” No one could really believe the Muppets were selling ham or Spam. The result is fair comment on the product.
19.13 PROTECTION
Some companies seem overly aggressive in defending their trademarks. Although corporate culture may cause them to be naturally more aggressive in business deals, the problem comes more from logic than attitude. A company that fails to defend its trademarks can lose them entirely. At best, the company loses some protection. At worst, the trademark name can be completely lost or become the generic name for the product.
Trademark protection can be difficult especially if you aggressively defend everything. A wimpy approach is not necessary, but it can be easy to assume a violation that is too minor to defend. Most of us, after all, are not in the trademark business. Trademarks are tools that are used and reused. Valuable trademarks must be defended. In the fast-paced changes of our industry, it may be best to give up on others.
Despite the trouble, a trademark protection plan is valuable. Such a plan would have six stages:
1. Know your market
2. Know your station
3. Record keeping
4. Registration
5. Audience awareness
6. Action/cooperation
19.13.1 Know Your Market
If you are going to defend your marks, you must not do it by stepping on the rights of others. A good trademark policy starts by understanding your market. How do the customers differentiate products? How diverse are the products? What marks are being used? Remember, television markets differ. The audience in one market may see things differently from your last station.
19.13.2 Know Your Station
Your station is full of creative people, and they create valuable products full time. Actively evaluate ongoing creations for exploitation. Is it just another weather-cast or a valuable opportunity? Are your people stealing ideas from competitors? Pay particular attention to stringers, contractors, and part-timers. Have they taken something that does not belong to them? Do you own their creations? Identify your best products for exploitation and start the process. Make your policy clear and known to avoid misunderstanding. Use internal memos and press releases to advertise your policy when needed.
19.13.3 Record Keeping
First use in commerce is valuable to trademark. First creation is valuable in copyright. Accurate records bolster any claim. When was it first created? How was it developed and by whom? What changes were made and when? How much money was spent? These records are valuable ammunition for later litigation.
19.13.4 Trademark Registration
When warranted, register your trademark early and often. Register it for all potential uses (service mark, trademark, trade name) and in all potential markets. If your signal crosses state lines, so does your trademark. If you need national or international registration, start the process.
19.13.5 Audience Awareness
A trademark’s value hinges on audience understanding. Can you show you have achieved that valuable “secondary meaning” or brand identification? Where, when, and how strong is it? This information helps not only your branding effort but your ability to defend the trademark.
19.13.6 Action
Where appropriate, defend your trademark vigorously. We want people to understand and like the mark but we want it correct. Trademarks are strongest when you are absolutely fanatical about expressing it exactly the same way every time: no poor uncontrolled reproductions of the logo, no cute variations on the slogan. Never let anyone use it unless it is clear that the work belongs to you. If you do not seem to care about your trademark, neither will the courts.
Cooperation is tricky in light of anti-trust laws. However, the cheapest trade—mark protection is out of court. Your competitors are doing just the same as you-trying to identify and differentiate their product. It is more productive, when possible, to take each station’s promotion in a different direction and not constantly step on each other’s brands.
19.14 CONCLUSION
This chapter was intended to give you an overview of trademark policy and some strategies for protection. You should take it for what it is—a warning and a starting point. Your station’s lawyers are needed to tailor your own brand strategy.
Your brands can be valuable, and they are worth protecting. You need to build your brand strategy on solid ground and protect it as you would any other investment. A good understanding of the trademark law can be just as valuable as a good understanding of branding.