Trademark Basics for Graphic Designers

What is a trademark?

A trademark is any phrase or symbol that functions as a brand, that is, it tells the public that there is a particular source or manufacturer for products or services (e.g., “Mattel” is a trademark for the toy company; the Apple logo is a trademark for the computer company). The scope of what can be a trademark is very broad-words, images, sounds and colors can all function as trademarks. Even packaging and promotional concepts for products or services can be protected as “trade dress,” which is another form of trademark rights (e.g., Apple's iPod ads).

Trademarks must be “distinctive.” “Distinctive” means consumers recognize the mark as a designation of source, rather than just a phrase or decoration. The relative distinctiveness (or “strength”) of a mark determines how much protection it gets against users of similar marks. What makes a mark “strong” from a legal standpoint may be the opposite of what designers and their clients might think of as a strong mark. Under trademark law, marks that describe or suggest some feature of the goods or services are “weak.” For example, “Apple” would be a weak mark for a bakery that sells apple pies. Other food businesses would be able to use Apple marks without infringing the bakery's trademark rights.

The strongest trademarks are made-up marks, or words or images that don't suggest the goods or services. Xerox is a classic example of a made-up mark. Apple and the Apple logo for computers are also strong marks. These trademark owners can stop businesses in a wider range of goods and services from using similar marks.“ For example, at this writing, Apple is trying to stop New York City from using an allegedly similar logo for its environmental awareness campaign (more on this below).

Who owns a trademark?

Unlike copyright, ownership of a trademark is not about who created the mark. Trademark rights are created by using the trademark for goods and services in commerce. So when you create a logo for a client, your client will own trademark rights in that logo as soon as she starts using the logo on products or promotions for her company.

What about copyright?

Copyright does not protect words, typefaces, typographical logos, or simple designs. However, many logos qualify as artwork that is protected by copyright. Trade dress, such as packaging, advertising and website designs, may also be protected by copyright. Technically, if you are a freelance designer you own copyright in such works unless you assign copyright to the client. (Under some situations employers or clients may own the copyright as work-made-for-hire. See Copyright Basics for Graphic Designers. However, as a practical and legal matter the copyright is not particularly valuable to you. Because these kinds of works function as your first client's trademarks, you cannot safely re-license them to other clients. That could put your new clients at risk for trademark infringement (more about this below).

The easiest way to deal with this issue is to grant an assignment of all rights or an exclusive license to your client for corporate identity packages, logos, websites, or any other works that are intended to have an ongoing, exclusive marketing presence for your client. But what if your client cannot afford the higher fee for all rights? You can establish a fee for certain levels of usage now, with additional fees for expanded use later, as the company grows. The future fees could be flat fees based on usage, or they might be a percentage of the company's income.

What is trademark infringement?

The standard for trademark infringement is ”likelihood of consumer confusion.“ This is a very different standard from ”substantial similarity“ under copyright law. Trademark law is not concerned about whether artistic expression has been copied. Rather, trademark law protects how a logo functions as a brand. A new trademark is confusingly similar to the original mark if consumers are likely to think that they represent the same company. This is generally analyzed by looking at the similarity of the trademarks, the similarity of the parties' respective goods and services, and several other factors, such as the strength of the original trademark, and the relative sophistication of each party's customers.

Unlike copyrights, trademarks can be infringed even if you created the new mark without copying the other mark. For this reason, it is very important to conduct a trademark clearance search before a new mark is adopted. Clearance searches can be done through intellectual property law firms or professional search companies. Generally, designers will want to ensure that the client is responsible for searching and clearing the new mark. The client's responsibility to do so should be spelled out in your contract. If your contract has an indemnity clause (where the designer promises to pay the client's costs in the event of an infringement claim), any liability for trademark infringement should be excluded from the indemnification. Otherwise, if it turns out that the new mark infringes another company's trademark, you could be liable for your client's infringement. A famous example of this happened in 1976, when NBC commissioned a large firm to design their new logo. When the logo was launched, the network was sued by a Nebraska PBS station, which had a logo that was essentially identical. NBC ended up spending $855,000 to resolve the claim.

What is trademark dilution?

Dilution is a legal concept that protects famous trademarks from being ”diluted“ by the presence of similar trademarks in the marketplace. Dilution can happen even if there is no confusing similarity. Rather, dilution occurs when consumers no longer associate the famous trademark with just one source. For example, if someone started selling ”Xerox“ apple pies, that would cause dilution of the famous Xerox trademark. Even though consumers would know that Xerox pies are not related to the famous Xerox photocopiers, they would now be associating ”Xerox“ with another product, and the value of the Xerox mark would be diminished.

Logo designs can also be the subject of a dilution claim. For example, Apple filed a claim in the U.S. Trademark Office alleging that New York City's new green apple logo both infringes and dilutes its apple logo. The infringement claim will be evaluated under the ”confusingly similar“ standard, which will involve assessments of whether the logos look similar, and whether the parties' respective goods and services are related. The dilution claim will be evaluated on whether the Apple logo is famous, and whether the two logos are so similar that consumers will think of the Apple logo when they encounter the New York City logo. While I don't think Apple has a particularly strong case, the general lesson for designers is not to create logos that resemble famous trademarks, even if they are for completely different industries.

What about fair use?

”Fair use“ will excuse unauthorized reproduction of a trademark under certain limited circumstances. This is not the same doctrine as ”fair use“ under copyright law. Generally, for trademarks ”fair use“ means use of the mark in a way that doesn't confuse consumers regarding source or endorsement by the trademark owner. This can include using the mark to identify the company in news or comparative advertising, an obvious parody of the mark, and in some political contexts. Although there are some exceptions, generally fair use will not apply to commercial design work. Even if you have a good ”fair use“ defense, be cautious about copying other trademarks. For example, Louis Vuitton litigated infringement claims against ”Chewy Vuiton“ dog products through trial and appeal. The appellate court recently held there was no infringement because of the obvious parody. Meanwhile, the maker of Chewy Vuiton products spent hundreds of thousands of dollars defending the lawsuit. If your contract has an indemnity clause, you could end up paying such litigation costs.

Portfolio use of trademarks is a grey area. Recently, some courts have held that portfolio use may not be fair use. Also, some clients do not want designers to show their logos because it could be perceived as an endorsement by the client. It is important to have clear language in your client contract saying you have the right to show the work in your print and online portfolios.

Protecting your own trademarks

As a designer, you have your own trademark rights in your company name and logo. There are three steps you should take to protect your marks. First, do appropriate clearance searches to make sure your marks do not infringe other trademarks. You can do an Internet search yourself. Back that up with a more comprehensive search done by a lawyer or professional search service (lawyers and search companies have extensive databases and searching skills beyond what's available to the public). This is an important step that can save you considerable time and expense later. If it turns out your marks are too close to another designer's, you will have to change your name or mark, then redesign and republish your marketing materials. You will also loose the goodwill and reputation you had built up under the first mark.

Second, consider applying for trademark registration. Marks are eligible for U.S. federal registration if you advertise online, or you provide services to clients in other states. Federal registration can be expensive and timely, but it is worthwhile. Federal registration gives you enhanced trademark protection, including the presumption of exclusive national rights (rather than just rights in the geographic areas where you provide services). Unfortunately, the registration process is difficult and the Trademark Office is unforgiving of mistakes. It's best to hire an intellectual property lawyer to prepare the application for you. If you don't qualify or can't afford federal registration, consider state trademark registration. State registrations are generally faster and less expensive, and they give you the presumption of statewide rights.

Finally, use the TM or ® symbol. TM means you claim trademark rights in the name or symbol. TM should be used for any mark, whether or not you've applied for registration. ® means that the mark is federally registered, and thus it should be used only after a federal registration is issued. Many designers consider these symbols unsightly and resist using them. However, they are important legally. It is not necessary that they be used with every appearance of the marks. Once per publication is sufficient, and it can be in mouse type.

First published in STEP Inside Design, July/August 2008