Eric Swetsky's newsletter, July 2001
Tips for advertising agencies
Have you heard this riddle? An agency's client loved the new corporate name coined by them. The client went wild over the design created for it by the agency's graphic designer. Why didn't the agency earn a penny?
Here's the answer to the riddle (there's two, so take your choice). The client refused to pay because he was sued for trademark infringement and the agency forgot to have a trademark search done to determine if the new name was available. Or, the client chose not to use the work, and the contract signed by the agency stated that the designer would only be paid if the client actually used the work.
The riddle has an air of reality to it, and it isn't at all funny. Here are some tips on how to avoid legal difficulties in three important areas that will at one time or another affect you and your business.
Tip # 1: Contract law
A contract is an agreement between two people to do something (for example, an agreement to create a marketing campaign for a client in exchange for a sum of money in compensation). An oral contract is as binding as a written contract. The benefit of a written contract is that it puts on paper what was agreed to so that there will be less doubt in that regard.
A written contract does not have to be a fancy, ten page document. It can be a purchase order issued by you or by your client, with the terms and conditions specified that are to govern the relationship (for example, when you are to be paid, and who is to own the copyright in the work created by you). Often, the terms and conditions in such a document tend to favour the person who created the document.
Here's the tip: Have your own, standard purchase order or standard retainer letter prepared and issued to your client. At least there will be a written document in place containing basic terms that will govern your relationship. It may be wise to have your standard terms drafted by a lawyer.
Tip # 2: Trademark law
A trademark is one or more words, a design (such as a logo) or a combination of the two that is used to distinguish in the mind of the public the goods or services offered or performed from those of another. A trademark does not have to stop at mere words. Today it is common for a trademark to involve an entire phrase, such as the American Express Company's trademark: MEMBERSHIP HAS ITS PRIVILEGES.
If your mark is similar to a preexisting one, and the products or services are also similar, it is possible that your trademark may be confusing and you may be infringing upon their trademark.
Here's the tip: If part of your assignment for a client is to create a new word mark or design mark for a client, to determine if the word or design is available, have a lawyer conduct a trademark availability search to determine whether someone already has the rights to that trademark or a version of the mark. Then, a potential problem can be identified right away before investing more time and money in it. As well, the search will tell you whether modifications can transform an otherwise unavailable mark into one that is usable. If the trademark is to be used both in Canada and a foreign country (the United States for example), a separate search must be done for each jurisdiction since trademark law is territorial in nature (that is, each country has its own Trademarks Register).
Tip # 3: Copyright law
The right granted to the owner of the copyright in a work is the sole right to produce or reproduce the work or any substantial part of it in any material form. The copyright in a work can be infringed if the original work was the source from which the reproduction was derived, and if there is substantial similarity between the alleged reproduction and the original. If the new work was created independently from the original work without any conscious or sub-conscious access to the original work, there is no infringement of copyright in the original work even if they may have similarities.
A final point. There is no copyright in an idea. All ideas are in the public domain; its the expression of the idea that is protected by copyright law. However, its always a rather fine line between whether an idea has been borrowed or whether the expression of that idea has in fact been borrowed.
Here's the overall tip: When creating a new design, or creating copy, come up with your own creation, without consciously or sub-consciously accessing someone else's work. Your own creation, created from your own thoughts and imagination, ought to be the real safeguard against a successful allegation of copyright infringement.
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