I don’t know if you heard about it, but last week a store opened in LA called “Dumb Starbucks”. Turns out, it was a stunt by Nathan Fielder, a comedian with a show on Comedy Central. Nathan Fielder’s show is all about giving terrible advice to small businesses. This stunt was an attempt to play with the parody fair use exceptions of intellectual property law. Starbucks did not make much of a stir about this trademark infringement. And that, I believe, is what is important to discuss for us today.
Imitation is the Highest Form of Flattery
So they say. It means a lot if you are important enough for SNL to spoof you. Even more if they do it on a regular basis. It means a lot for musicians if Weird Al Yankovic parodies your music. It is a very common, very protected, right for comedians everywhere. Parodies are one of the best forms of entertainment.
The problem with all of this is that trademark law is different than copyright law. Further, there are more issues when it comes to the trademark side of Starbuck’s logo.
You see, when “Dumb Starbucks” launched, it created a number of trademark claims that could be brought by Starbucks. There was the issue of dilution and infringement. But, there was also the issue of parody.
Parody is typically seen in entertainment. Or in art. In fact, Dumb Starbucks attempted to use the art argument in their FAQs handed out to customers. Dumb Starbucks claimed to be an art gallery. Claiming the coffee was the art. That, they argued, is why they did not need to bother with the health code (which was ultimately what shut them down). This of course, was a focus on the copyright side of the image used by Starbucks as a Trademark.
Trademarks are both works of art (meaning they can be copyrighted) and a way of letting consumers know the source of goods (the definition of a trademark). To create a parody of a work of art is a copyright issue. To parody a brand for business purposes is a trademark issue. Dumb Starbucks thought it was safest to try the copyright argument. We all knew it wasn’t going to last.
Parody in Trademark?
Though parodies are more common in the art world, they are possible in business. Parodies of a trademark need to be “obvious”. There are several instances of parodies like this in recent time. One of these, perhaps the one best known in the news, was the NorthFace/South Butt law suit. That case lead to litigation and a settlement, ultimately leading to the dissolution of the South Butt company. NorthFace was clearly in the right by attempting to protect their brand. It was a very expensive ordeal that created mixed opinions by the public over how NorthFace handled the situation.
Starbucks had the same decision to make this past weekend. The issue of protecting a trademark for any company, large or small, is a delicate one in our current connected society. There is even a name for the phenomenon of trying to stop something before it becomes known, but it blows up and becomes viral. It is called the “Streisand Effect”.
Starbucks was well aware of this possibility. They have, I am sure, an experienced team of lawyers protecting their intellectual property. Of course, this infringement, like so many others, went away as quickly as it came. During that time, Starbucks did not make a big deal about the situation. They did mention, when questioned about it, that Dumb Starbucks should not be using their trademarked name. This is the most fundamental step to protecting their mark. In this case, it worked out well for Starbucks. They did the minimum necessary to protect their name, but they did not blow what turned out to be a harmless situation out of proportion.
This whole debacle made me think about intellectual property and how you deal with this delicate intersection between your legal rights and the explosive nature of a viral story on the internet. Whenever something like this happens, the company whose mark is being infringed has some real decisions to make.
What do you need to do to protect your trademark?
How can you protect your mark without destroying your brand?
As we have discussed before, if you don’t protect your mark you can lose it. But, if you anger everyone by protecting your mark, you may make it worthless. So, how do you protect your mark without destroying your brand. What must you do to protect your mark? We have discussed a few weeks ago what a “Cease and Desist” letter is and how to draft one. The issue in a situation like this is, how quickly should you let it escalate? How firm should your initial letter be? Realize, no matter what the law says:
In today’s very connected society, anything you say can and will be used against you in commerce.
So, how do you make sure you are protecting your legal rights, without making everyone think you don’t have a sense of humor?
Have a Sense of Humor About Trademark Infringement
Poke fun at the entire situation. Make light of what you have to do. Don’t make threats at first. Simply let the person know what is going on. One of the best examples I have ever seen of this was Jack Daniels’ letter to an author who used a replica of Jack Daniels’ logo as the cover of his book.
Go ahead, read it, I’ll wait.
You see how Jack Daniels made sure to make the law the bad guy. This approach, the “I hate to tell you this, but you can’t do that” approach is a perfectly polite way to bring the situation to the attention of the infringer. There don’t have to be any threats at this point, no finger pointing, no demands, just a polite letter notifying the company infringing on your trademark that you can’t let them do that or it would cause problems for the brand they obviously love. Then, make an offer of some kind.
Don’t Be Afraid to Make Money Off of the Situation
Realize your intellectual property is yours. In Jack Daniels case, they chose to pay for the author to have his cover remade. But, why not use it as an opportunity for economic gain?
What if Jack Daniels’ had offered a licensing deal? It didn’t have to be big. Nothing serious. That would have legitimized the use of the intellectual property and given Jack Daniels’ more exposure.
Starbucks could have done the same. What would have been wrong with striking a licensing deal with “Dumb Starbucks”. Some type of deal that gave Nathan Fielder and Dumb Starbucks a limited right to use the Starbucks logo for the purposes of having a parody brand. Starbucks makes money. Starbucks protects its brand. Dumb Starbucks becomes legitimized and everyone is happy. There is nothing that stops you from profiting off of someone’s use of your trademark. In many instances, this makes the most sense for everyone.
Technically, if you pushed the issue, you would get money anyway. It is your trademark. Wouldn’t it save everyone time and money to work out a licensing deal that makes sense instead of filing a lawsuit that will take years and a lot of money to see it through. With a licensing deal, you gain a lot more control over how someone is using your trademark and you have them under contract, so it becomes a lot more clear if they step out of line. Isn’t that the best for everyone. Not to mention, once you develop a licensing structure, you create more protections for your brand.
A Case in Point
Do you know who owns the trademark “Droid”?
They filed for the trademark shortly before Verizon released the first “Droid” mobile device. Have you ever paid attention to the small print on a droid ad?
Disclaimer: I am not claiming this as my intellectual property, this is a Verizon advertisement, I am simply using it for educational purposes to explain the ownership of trademarks and the economic value placed on them.
Lucasfilms, Ltd. Owns the rights to the Droid trademark. That means every phone, every advertisement, or any other use of the trademark means some undisclosed amount paid to Lucasfilms, Ltd. For the use of that trademark. See what they did there?
Lucasfilms did not push to have Verizon stop using the trademark, they negotiated a licensing deal. Everybody wins.
Now Go and Do Likewise
You can do the same. So, the next time someone puts “Dumb” in front of your trademark, send them a nice letter letting them know that you are required by law to protect your trademark, but you are more than willing to work with them and help them build a better brand with a licensing structure. A simple way to grow your business and put the person trying to profit off of your hard work and intellectual property on a contractual leash.
Cases are much easier to win once a contract is involved.
I will talk to you next week, unless you talk to me first 😉
P.S. We talked about this topic on the podcast this week as well. Check it out?