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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Andrew Tellijohn
December 2004

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Marketing fix.its: Advertising

marketing fix.its advertising  

What every advertiser
should know about
trademark law

by Christopher Schulte  

Your company is excited. You are rolling out a new product. An advertising campaign is chosen as the best vehicle for spreading the word to your consumers.

The company’s internal advertising department begins work on the project, or an outside agency is retained.  The "creative" staff comes back with various concepts by which they believe sales will be generated.

A theme is chosen, and work begins on developing print ads, television and radio spots, billboards and a Web site heralding the arrival of the new product. The appropriate media space is purchased and the product is launched.

And then the wheels come off. A complaint arrives at the legal department, which brings the entire rollout to a screeching halt.

As it turns out, a third party claims ownership in a photograph from the early 1900s, which is the subject of the print ad. Another claims to own the melody to which your company appended its lyrics for its radio jingle.

The television ad contains a street scene in which one can make out a local celebrity and several individuals, none of whom consented to the reproduction of their images. The "employee" who developed the Web site was actually a contractor, and due to a dispute over his fee, he has unplugged the site, claiming ownership over the underlying code.

And to top it off, the ad's blockbuster tag line is virtually identical to another company’s slogan in a related industry.

Fortunately, these disasters are rare. But legal risks do abound when a company seeks to advertise. A fair number of these legal risks derive from intellectual property laws, the laws that protect ideas, brand names and creative works. In advertising, the most common laws implicated are copyright, trademark, unfair competition and rights of publicity and privacy.

Own every element
In any advertising effort the company must consider two elements of exposure: making sure the company owns every element in the ad to avoid claims of ownership by third parties who helped create the ad, and avoiding claims of infringement or invasion of rights of privacy/publicity by strangers to the creative process.

The good news is that the company is the owner of advertisements that are created in-house. Trademarks are owned by the party that first uses the trademark in connection with the sale of the relevant good or service in the marketplace. Thus, the person who "invents" the trademark (brand name or tag line) does not own it absent some agreement to the contrary. The company automatically owns slogans, tag lines and brand names created in-house.

Similarly, the law gives ownership over copyrightable matter to the employer as long as its creation is something within the employee's job description (the "work for hire" doctrine). Thus, in-house creative staff that write ad copy, take photographs and write music for the advertisement do not own those works — the company does.

Different rules apply when an outside vendor is used to create an advertisement. Without a contract, the trademark laws give the employer ownership of taglines and brand names rather than to an ad agency (but through an agreement, ad agencies often reserve rights on concepts not selected by the client). The ad copy, photographs and music created by the ad agency, however, are owned by the ad agency unless transferred by a written assignment to the company. 

But life is messy, and so is the creative process. Often advertisements are a collaborative effort between company employees and outside vendors. 

For example, the company may employ a creative staff to conceptualize its advertisements, but then hire freelancers to bring the advertisements to life, including graphic designers, musicians, voice over specialists, photographers and stock photography houses.

Each of these parties will contribute something to the final advertisement, and it is important that an agreement is in place with each that transfers sufficient rights to the company to enable the campaign.

Often these rights are only licensed, as in the case with stock photography or music. Care should be exercised in selecting the proper license. Many disappointments occur when a company learns it cannot take a successful ad to a new medium without paying substantially more for the rights at issue (photos, artwork and actors sometimes become more expensive once they become famous through an advertising campaign).

Each agreement should also include a warranty that all creative materials provided by the vendor are either original to the vendor or they have obtained the appropriate rights from third parties.

Ownership of photographs, films and sound recordings also carry an additional layer of possible problems. The photographer owns the copyright in the photo but not the subject matter of the photo. Using a person's image or a third party's recognizable product in a dominant position in an advertisement without permission exposes the company to a claim.

Use of a competitor's (or even a non-competitor's) trademark for comparison requires extra attention because of the heightened risk of attack of the ad by the trademark owner. In most cases a company should identify its competitor in a typed format (rather than using their logo) and adding clarifying language as to the proper owner of the trademark.

[contact] Christopher Schulte is a trademark and corporate lawyer with Meagher & Geer in Minneapolis. He chairs the firm's technology, Internet and intellectual property protection group: 612.338.0661; cschulte@meagher.com; www.meagher.com