copyright law in a nutshell
In Australia copyright subsists solely by virtue of the Copyright Act 1968 and the Designs Act 2003 which are both Commonwealth Laws (ie Federal Laws). There is no “common law” concept of copyright in Australia. The law is found in the legislation passed by the Federal Government and interpreted by the courts.
Copyright is as “the exclusive right to do certain acts relating to literary, dramatic, musical and artistic works, sound recordings, cinematograph films, television or sound broadcasts and published editions of works.
The Copyright Act gives protection to an author of such works etc, except where that author has created such work for an employer or its assigned to another person or company.
Copyright is generally for the life of the author plus 70 years.
If the first publication of the work is anonymous or pseudonymous, copyright is for 70 years from date it was published.5.
If there where two similar works independently produced, the author who published first will not be able to prevent the other from publishing.
Copyright exists immediately upon the work being created, you don’t register copyright it is obtained at the creation of the work. Registration exists for this such as patents and trademarks.
For Copyright to provide protection the work must be original, in novel but not completely novel
The holder of copyright of works gives the copyright holder the right to reproduce, publish, perform in public, or communicate the work to the public and to allow others to do the same generally by way of a licence.
Infringement of copyright can come either directly or indirectly. Direct occurs when a someone , other than the copyright owner or the licensee holder uses the copyrighted works with out permission.
Indirect infringement occurs where a person, without the licence of the owner, imports into an article which would infringe copyright if it had been made in Australia . or sells or hires an article knowing that it infringes the copyright.
The main remedies available to an owner or exclusive licensee for an infringement of copyright are:
· an injunction;
· damages or an account of profits;
· additional (or exemplary) damages;
· delivery up of copies of the work or damages for its conversion or detention;5.
· an injunction ;
· delivery up and destruction of the infringing works
An infringer in some circumstances may also be subject to criminal penalties
In the entertainment industry trademark law offers performers some degree of protection for artistic credits and moral rights. It can serve to supplement copyright law in affording protection against the use in other entertainment works of certain features of a product (for example titles and character names) that cannot be directly copyrighted.
In this article we explore how trademark law is applied in the entertainment industry and how a court will determine if a trademark infringement has occurred. In particular, we look at how this test was applied in the case of Hormel Foods Corporation v Jim Henson Productions. Whilst it is a US decision the law is relevant in Australia (it’s also not very often that we get to write on the law with references to Miss Piggy and processed meat).
The decision in Hormel Foods Corporation v Jim Henson Productions gives a detailed look at how the court applies this test to entertainment trademark cases. This dispute involved the character Spa’am in the movie, Muppet Treasure Island, and whether it had infringed upon Hormel Food’s trademark for SPAM luncheon meat.
What is a trademark?
A trademark is any word, name, symbol or device used to distinguish goods or services dealt with in the course of trade. Trademark protects consumers in their choices and use of goods by providing easy recognition of the product whose features consumers prefer.
This kind of brand name recognition gives producers an incentive to preserve or enhance the attractive quality of their product, but it also gives imitators an incentive to use the name without matching the product quality. The role of trademark law is to bar any use of a name or symbol that is identified with a product where such use may confuse consumers about the product they are seeking to buy and use.
Trademark infringement test
If your trademark is being used by someone else you have a right to bring a trademark infringement claim. When examining a claim for infringement, the court will address the question as to ‘whether an ordinary prudent purchaser would be likely to be misled or simply confused as to the source of the goods or as to the sponsorship or endorsement of the mark.’
Hormel Foods Corporation v Jim Henson ProductionsIn the Muppet movies Spa’am was the ‘high priest of a tribe of wild boars that worshiped Miss Piggy’. Hormel, makers of the well-known luncheon meat SPAM, felt that the use of the name Spa’am on Muppet Treasure merchandise such as clothes and toys may cause confusion to consumers and dilute the famous SPAM name. The court examined the following eight factors to determine if a trademark infringement had occurred:
1. Strength of the mark
Usually if the mark is strong the court will conclude that a consumer would be confused by another weaker mark. However, in this case SPAM and the Muppet brand of humour are both widely recognised household names in their own right. Due to the familiarity with both the brands, the court found it would be unlikely for consumers to be confused about the identity of the products and consumers would be likely to see the name Spa’am as the joke it was intended to be, namely to parody the luncheon meat.
2. Degree of similarity between the marks
The court examines the similarity of marks visually (side by side) and in the context they are being used. In this case, the court found a passing resemblance with the two names. Spa’am is divided in two by an apostrophe and has two ‘As’. But contextually, the two marks appear in strikingly different contexts and visual displays. Spa’am is depicted as a wild boar puppet and all products have the Muppet Treasure Island branding on them. Even though there are some similarities in the name, the court ruled there would be no confusion and that consumers would realise that the Muppets were parodying the SPAM name.
3. Proximity of the product
The next step is to look at whether the products are competing in the same market. In this case, the two products operate in two distinct merchandising markets. The consumers of merchandise in the SPAM market would generally consume luncheon meat and the other product is operating in the puppet entertainment market. For this reason, the court found it would be unlikely that consumers would be confused as the products are not in the same market.
4. Expanding into other markets
This test preserves the interests of trademark owners to expand into other avenues or related fields. As Hormel had no intention of entering any SPAM products into the puppet entertainment market, the court found that Henson’s Spa’am did not infringe on any future market opportunities.
5. Actual confusion
The court examines any actual evidence of consumer confusion*. In this case, there was no evidence presented and therefore the court dismissed this part of the test.
6. Bad faith
The court examines whether the mark has been used in bad faith. In this scenario, Henson’s parody of the SPAM name was not intended to be done deceitfully. Henson had nothing to gain from creating confusion among SPAM consumers nor wished to create a business relationship with them. For this reason, the court ruled that the mark was not created in bad faith.
7. Quality of the mark
The court examines whether an inferior product may cause injury to another’s trademark. Hormel was concerned that the Spa’am character would call into question the quality of SPAM luncheon meat. However, the court ruled that Spa’am was a positive character who was not unhygienic and that a simple comic reference to the fact that SPAM is made from pork would not damage the SPAM image, especially in light of the numerous other humorous references to SPAM in the community.
8. Consumer sophistication
In this test, the court examines the target audience to see if they would be likely to be misled. The court found that a child or adult would be likely to buy merchandise featuring Spa’am because they like the Muppets, not because they mistakenly think that it is a SPAM product.
Weighing all of these factors up, the court found that consumers were not confused about the marks and therefore no trademark infringement was found.
Artists have a right to protect the goodwill and reputation they have built up in their brand of work and consumers also have a right not to be misled. Trademark law can be used as an additional source of protection other than copyright law to protect and progress the rights of artists in the entertainment industry.
*McNote: It might be difficult to confuse a can of ham with an animated pig?
Recently a customer of ours was introduced to the world of competing interests in online real estate. In short, the customer had registered a trademark in the name of a service it provided, but its competitor registered the exact same name as its domain name. To make matters worse, the name was synonymous with a specific type of service offered in what is considered a very specialised industry. Consequently, online traffic destined for the trademarked customer's company was redirected to the competitor.
This is by no means a novel issue, but it is a growing one. A company’s website is the first port of call for customers looking to gain immediate access to its business, and vice versa. Unfortunately, there remains a lack of understanding among business owners on the importance of the rights and the protections associated with trademarks and domain name registration.
This article will offer some perspective to business owners on the legal implications that can flow from these sorts of issues.
Trademark v domain name
Naturally our customer’s first question was, “Can they do this?” In short, no.
Registering a domain name does not give you proprietary rights to the name. A party that registers a domain name does not own the name but holds a licence to use it for a specified period, subject to terms and conditions. The licence may be revoked by the domain name regulatory body (auDA) in instances of trademark infringement (see Remedies for Infringement below.)
All that is required to register a ‘.com.au’ and/or ‘.net.au’ domain is that it must exactly match or be an acronym or abbreviation of the registrant's company or trading name, trademark, or otherwise be closely and substantially connected to the registrant.
A trademark is defined as:
"a sign used, or intended to be used, to distinguish goods or services provided in the course of trade by a person from goods or services provided by any other person".
The owner of a registered trademark has the exclusive right to use and authorise the use of the trademark in relation to the goods and services for which the trademark was registered.
A registered trademark is a perpetual right which may be sold to or licensed for use to other parties. Following the payment of the registration fee a trademark may be renewed every 10 years, indefinitely.
The only way to claim ownership of a domain name is to have it trademarked. If the owner’s rights are infringed, then they generally have a right to have a third party remedy the infringement or seek compensation for the loss and damage caused by the infringement.
Remedies for infringement
The auDA: .au Domain Administration Ltd, is the policy authority and industry self-regulatory body for the .au domain space.
The auDA offers a Dispute Resolution Procedure (auDRP) that brand owners can use when their brands, marks and IP are registered by unauthorised third parties.
The purpose of the auDRP is to provide a cheaper, speedier alternative to litigation for the resolution of disputes between the registrant of a ‘.au’ domain name and a party with competing rights in the domain name.
The dispute is handled by an independent provider (the Provider) of dispute resolution services that is approved by the auDA.
Brief outline of the process:
In Australia, some intellectual property rights can exist without registration, such as copyright and unregistered trademarks which have acquired a reputation. In these cases, there are two areas of protection.The first – common law – gives protection to those with a claim to unregistered trademark rights.
The act of ‘passing off’ protects the goodwill or reputation developed from the use of the unregistered trademark by the first trader, where another trader's conduct misleads or confuses a significant number of consumers.
An unregistered trademark does not provide any property rights in the trademark itself. The most common remedy for passing off actions is an injunction ordering the other trader to stop using the trademark and/or damages.
The second area of protection is Misleading and Deceptive Conduct, which prohibits a corporation from engaging in conduct that is misleading or deceptive, or likely to mislead or deceive. The remedy for Misleading and Deceptive Conduct is typically damages.
It is important to note that not every instance of trademark infringement is malicious and can occur by coincidence. More often than not a letter outlining your claim as the trademark owner to the alleged infringer proves to be the most efficient and cost-effective solution - as proved to be the case with our customer.
Nevertheless there will be instances where an apology and the removal of the domain name will not repair the financial damage caused.