Reprinted with permission from Stitches Magazine – Written by Steven Freeman
Don’t wait until you have to hire an attorney to get briefed on intellectual property law.
For a small-business owner, it’s tough to turn down business. If you’re offered design work that you suspect could infringe on someone’s trademark or copyright, however, industry veteran John Swinburn advises that the only responsible answer is “no” – at least, until you’re sure you’re legally covered. Swinburn is executive director of the Dallas-based Embroidery Trade Association, which devotes a chapter of its Master Embroidery Manual to the subject of intellectual property. According to Swinburn, copyright is any intellectual property that can be conveyed in words, and, unlike a logo or trade mark, is automatic – you own it as soon as you create it. Trademarks – symbols or words representing a company or product – must be registered and are more commonly dealt with in the embroidery trade.
“Be very careful, because it’s so easy for people to stumble into breaking copyright and trademark law,” Swinburn says. “It’s tough for an embroiderer to be held totally accountable, but you need to have prudence to recognize commonly known logos of companies. If an embroiderer should have known that a trademark was owned by Exxon Mobil Corp., they’re going to find themselves in hot water.” A common error cited by Swinburn is the belief that if a logo is altered to a certain degree, is safe to use without permission. “That’s dead wrong,” he says. “If you start with something that’s trademarked, you start with something somebody else owns – simply changing it doesn’t mean you don’t need to get permission. “Rather than finding yourself and the customer in trouble, you need to go back to the original owner [of the logo] and say, ‘This was presented to me; I want to make sure it doesn’t look too much like yours,'” he says.
It’s your job to ensure you’re not saying these famous last words: “But, Your Honor, he told me it was OK to use the XYZ Inc. company logo.” Simply put, Farley Weiss, a Phoenix-based copyright and intellectual property attorney, says, “It’s your responsibility to ensure you have the permission of the copyright owner before you use their design on anything – before you do the work.” Where it gets complicated is obtaining permission and ensuring the permission has been granted by the legitimate owner or agent of the copyright.
Embroidery shop owners agree that checking first is the most important safeguard to avoid legal trouble. “If a UPS driver wants us to embroider the UPS logo on something, we have a form he has to take back to his office to get permission to embroider this logo,” says Dan Fisher, owner of an EmbroidMe (asi/384000) franchise in Exton, PA.
You aren’t expected to be a private detective and go to extreme measures to verify the identity and credentials of a person who presents a design to you for embellishment. However, if push ever comes to shove and you find yourself defending your actions in court, it’ll be expected that you’ve at least done the minimum. This will include written permission from the copyright holder on official company letterhead and signed by an authorized agent of the copyright holder. It isn’t sufficient to have a “middleman” sign an affidavit stating he has the “right to use” the copyrighted material. Such a document will help – but only in your countersuit of the person who didn’t have the authority to use the design in the first place.
Swinburn advises asking for a letter of permission on company letterhead with contact information, so shop owners can follow up if need be. The letter should state that the person asking to have the work done is either the owner of the logo or has been given explicit permission to use it. “What’s important,” Swinburn says, “is that that person will take responsibility if the material was copyrighted or trademarked and will not hold [the embroiderer] responsible.”
Some companies will pursue copyright infringement more vigorously than others. For instance, if you ever “resell” unauthorized product embellished with the properties of any major sports franchise (or film, music, etc.), you’ll most likely be sued before you can say “process server.”
Some companies will be kind enough to send you what’s called a cease and desist letter before they take any further legal action. A cease and desist letter will come from the attorneys of the company that believes you have violated its copyright. The letter will instruct you, “Stop using our logo now, or there will be consequences.” If you receive a C&D letter, immediately stop using or selling the copyrighted material and take the letter to your attorney to have them craft a response stating immediate action has been taken to cease the objectionable activity. Mail your letter certified to the law firm that sent the cease and desist letter and if there’s a third party, contact them to make them aware you cannot do any additional work until the copyright issues are resolved.
Promo copyright infringement
Let’s say that all you wanted to do was build sales. So, proactively you found some artwork for a hot prospect and produced some samples. Then, being the hard-working entrepreneur you are, you set up a meeting with XYZ Inc. to showcase your products and service with its logo. Everything seemed to go well – the meeting was a success and you even received a few verbal purchase orders. You feel great about yourself, since it seems that your efforts to land a new customer have succeeded. Then, three days letter you get a cease and desist letter from XYZ Inc. warning you not to use its copyrighted logos for your personal or business promotional use.
What’s going on here? “By the strict letter of the law, you run a risk using copyrighted material to create promotional materials for a potential client without their prior consent,” Weiss says. “However, in most cases like this there’s no harm, no foul, and whereas technically you could be sued for copyright infringement, there’s nothing to be gained by such a suit.” XYZ Inc. is simply telling you in no uncertain terms that it wants you to respect its intellectual property rights. In response to a cease and desist letter in this case, inform all concerned parties that you have destroyed any and all questionable materials; then ask if there is a different path to take for establishing a business relationship with this potential client.
Sticky stock designs
So, who owns the stock designs you just purchased? This question isn’t easy to answer because a great deal depends on who you bought the stock designs from in the first place. But in general, you don’t own them. When you buy stock designs from most major distributors, typically you don’t own the design. Rather, you own a license/contract to use the design according to the terms spelled out in the purchase agreement.
Space limitations don’t allow a full examination of these types of contracts because even though they share similar language, each is different and needs to be reviewed on its own merits. When you purchase the design(s), you’re free to use the design to create and/or resell products you embellish or authorize an agent to embellish for you. What you absolutely cannot do is make copies of the stock designs and either give or sell them to anybody, period. That means you can’t give a copy of your favorite design to your Aunt Madge who owns a home machine that reads DST files. This is a clear violation of the copyright and can carry significant penalties if ignored. Additionally, you can’t modify the design and then call it your own.
There are most likely exceptions to this rule, but it’s not worth the legal hassle or cost of defending yourself to fight this point on a $25 stock design. Be aware that several of the major stock design companies are very aggressive about protecting their properties, so don’t make the mistake of testing them – it can be a costly mistake.
University and corporate logos
With university logos, Swinburn and Fisher advise getting permission directly from the college itself. Depending on the school, this can be fairly easy to do.
“There are some good [university] Web sites where you can go right to the home page and find out the proper use of a logo,” Fisher says. Contacting athletic directors is another good bet, he says. “They don’t want royalties,” Fisher says of most schools. “They just want it done right.”
Getting it right is equally important to corporations, many of whom are very exacting about how a trademarked item must look. Swinburn cites Disney as a company obsessively protective of its brand; according to Fisher, Alcoa is so particular about the shade of blue in its logo that the company would prefer it done in black and white if the color can’t be matched exactly.
Fisher says embroiderers should also be aware of whether a school has a contract with a major apparel line; putting the logo of a “Nike school” on an Adidas product could obviously create a problem. The Web sites of suppliers such as SanMar (asi/84863) will sometimes post warnings about how their name-brand apparel can be used.
Of course, misrepresenting any clothing as being part of a branded apparel line is a huge no-no. Phyllis McLaughlin, an EmbroidMe owner in King of Prussia, PA, has a creative way of putting people off who come into her store looking to add a Nike swoop to a $2 or $3 shirt. “I say, ‘We’ll be glad to do that. That will be $110,'” she says. “Then they change their mind.”
Copyright law can be very complicated when practiced in a court of law. However, out on the street, it can be somewhat more clear and comes down to this: If you want to avoid any chance of impropriety, simply make sure you have the express written permission of the copyright owner to use their material. Is this always practical? No. Because of that, you’ll need to make decisions based on information available to you as well as the risk you’re willing to expose yourself to. There’s a plethora of information available at www.copyright.gov to help you make more informed decisions.
JAMES STURDIVANT, a PA-based contributing writer, contributed to this report.