Wisconsin Business Law and Litigation
A blog dedicated to Wisconsin business law and business litigation matters, authored by Chris Moander of the Moander Law Firm.

In an attempt to be witty, I tried to find some jokes on the topic of copyright law and, sadly, I found none, which is a real shame. My goal was to provide some levity on a subject that is in the papers daily in regards to pirated music and movies. Clearly, I did not meet my goal, so let’s delve into the area and how it can affect your business.

Copyright is the primary tool used to protect works of authorship (ex: music, movies, books, etc) under federal law (the Copyright Act). The goal is to protect the expression of ideas, but not the ideas themselves. Consider the concepts of authorship and expression together - combined, they apply to more than just a few set concepts, like movies. Rather, copyright can apply to your marketing materials, your website designs, or various other pictorial or literary works used in your business.

There are a few requirements to secure a copyright:
(1) copyrightable subject matter - covers a fairly broad spectrum of things, but generally (and I do mean generally) literary works, images, music, and video recordings are protectable insofar as the expression of the work goes (remember that ideas themselves can’t be protected). You cannot copyright things like procedures, processes, or systems - note, though, that these things can be protected by other areas of the law.
(2) modicum of originality - translated, you need some original input into the work.
(3) fixed in a tangible medium of expression - translated, one needs to be able to perceive, reproduce, or otherwise communicate the work (ex: recording music on a CD).
(4) Register the work for copyright protection with the U.S. Copyright Office.

• While registering a copyright is very important, one’s copyright is effectively created at the time the work is fixed (see #3 above).
• Registration with the USCO allows you to sue should someone infringe on your copyright. Please note that you don’t have to register with the USCO to have a copyright, but generally you can’t sue for infringement without having registered.
• Registration also lets the whole world know that you own the copyright.
• Sometimes, you will have to submit copies of your work to the USCO for filing in the Library of Congress. Whether you need to do this is a case-by-case judgment.

Business owners need to know who actually owns the copyright for work produced. The Work for Hire Doctrine, which determines whether a business has a copyright on work, is applicable in two situations: (1) the work must be made by an employee in the scope of his or her employment (as part of the job) and (2) if there is a written agreement that the work produced is a work for hire. If the work is produced in either scenario, the business owns the copyright. As always, the key is a written agreement stating who owns what.

As with all contracted-for work, there can be disputes about whether a person or entity is an employee or independent contractor and thus who has the copyright. Courts will look at several factors, including the control the business had over the work’s creation, tax status of the creator, whether employee benefits were extended to the creator. If you don’t watch these ownership issues and handle them with care, you could lose the copyright to an independent contractor.

Copyright holders possess three major rights: (1) the right to reproduce the work, (2) the right to distribute the work (sell it for profit), and (3) the right to create “derivative works,” works based on the original copyrighted work (ex: all the Star Wars films after the original movie from 1977). If the copyright is registered, the copyright holder has the right to sue infringers. The duration of these rights extends: for the life of the creator plus seventy years; for the life of the last co-author (if there is more than one author) plus seventy years; and for works-for-hire, ninety-five years from first publication or one-hundred twenty years from creation, whichever expires first.

Copyrights are great to have because they protect your work but they can also be sold with the company if you decide to bail. As with most legal work for startups, the up-front costs are very much worth it. Your attorney can determine whether your idea could infringe on another’s copyright and, if not, can secure your copyrights to the benefit of your company.

Trademarks are designed to do one thing: protect the goodwill generated by your company and protect your consumer’s ability to distinguish your products/services from your competitor’s. Your trademark will cause a consumer to associate certain qualities and recollections with your business - in other words, the meaning of the mark to the mind of your customers. Thus the economic value of a trademark can be enormous. A good example is the Nike Swoosh, which is recognized all over the globe and therefore Nike gets the benefits of people recalling what company the Swoosh represents. Certification and Collective marks, those used by trade associations and commercial groups, can also be protected as they, too, reflect qualities and recollections of patrons.

A protectable trademark must be distinctive (to a degree) from all others in the marketplace. Generic, descriptive, and commonly used terms are not enough. Trademarks that are “fanciful” are protectable. For example, Kodak or Exxon - the terms themselves lack inherent meaning, but were created to brand a company’s products. “Arbitrary” terms are also protectable. Examples include Amazon.com and Apple Computer - the terms do have inherent meaning, do not describe the products offered, but have acquired secondary and unique meaning to the public. You can also protect “suggestive” terms, those terms that suggest but don’t describe the product or the product’s characteristics. Suggestive terms can be tougher to distinguish than other protectable trademarks because they require the consumer to use their imagination to connect the goods/services to the appropriate use (thus a good deal of proof is necessary to support protectability). For example, Greyhound is a suggestive trademark because it implies that the bus service is fast, like a greyhound.

A business does not need to register a trademark to get protection from infringement. First use of the mark and continual use of the mark are enough to establish rights to the mark. However, registration is always important to formalize rights and let the world know the mark is yours. In Wisconsin, trademarks are registered with the Secretary of State for a nominal fee. Protection is effective for ten years, but renewal applications must be received by the Secretary of State within 6 months of the expiration date. Protection of the trademark through the state is limited. Better protection is offered through the U.S Patent and Trademark Office, although the process is more costly and complicated. USPTO protection announces to the whole world that you own the mark and secures protection across the U.S.

Aside from registration, it’s important for your attorney to verify nobody else uses your mark or a mark that is very similar. This is where the real costs of trademarks appear. Good trademark research is not cheap, but as usual, it’s imperative to the protection of your work. You don’t want to start using a mark and build up a customer base only to get sued two years down the line and have to alter your now well-known mark.

As a trademark holder, you have some specific rights. One is the ability to sue for infringement. Infringement means that someone is, in some form or another, interfering with the use of your mark - they are potentially tapping into your customer’s goodwill. In infringement cases, courts usually look at factors such as whether your opponent uses its mark in the same geographical area, if goods/services are similar, and the strength of each mark (uniqueness). Another right is the option to sue for trademark disparagement - basically, another entity is ripping on your trademark and goods/services under that mark through misrepresentations of fact. Finally, you also have the right to remedy trademark dilution should your mark be “famous” (it’s not always clear what constitutes a famous mark) - if a competitor is devaluing your mark by using their own, you might be able to recover damages.
Trademarks, in my personal opinion, are the most valuable intellectual property you can own. Trademarks are signs of quality or experiences that stick in the minds of your customers for a very, very long time - they are marketing at its finest. As a quick experiment in the value of trademarks, think back to your childhood…now, think about places you and your family would eat out…I’ll bet that burger chain is still something you think of fondly…and I will also bet you can recall imagery about that restaurant….and at least some of that imagery contains a trademark, like McDonald’s golden arches. What’s more, trademarks accumulate value of time and that value can be sold with a company - all your years of hard work in customer service can yield volumes of extra cash when a business is finally sold. Trademarks are a worthwhile investment.