This is our blog, where we post stories, insights, and (hopefully) interesting content for everyone to enjoy. Alec is the primary author of all of these posts, he posts about every three weeks. If you have any questions about anything you read, please don’t hesitate to contact us for more information.
What’s in a Name? A Potential Lawsuit
October 29, 2018 – Alec Blalock
There were, at one time, two different Burger Kings in Illinois. The one we all know today started in Florida in 1953. The first one in Illinois opened in Skokie just north of Chicago in 1961. Likewise, in 1957 in a little town called Mattoon, IL, located in south-central Illinois, a small ice cream shop opened up a different Burger King. Neither were affiliated with one another and neither had any actual knowledge about each other. The two wouldn’t come to blows until 1962 when the big Burger King opened a restaurant in Champaign and the little Burger King opened a restaurant in Charleston. The small Burger King then sued the big Burger King under Illinois state law to restrain the big Burger King from using the name in Illinois.
The little Burger King had claim to the mark under state law and were registered under the State trademark registry in 1959. The big Burger King had a federal trademark that was issued in 1961. Looking at the world today and seeing Burger Kings everywhere, clearly you already know the big Burger King won this battle. But why? After all, the little Burger King filed for a trademark first, and existed in Illinois first, why didn’t the courts kick out the big Burger King? Well, it’s because the big Burger King had filed for their trademark federally. The courts found that a federal registration is prima facie evidence (evidence that’s accepted as the truth) of ownership over a trademark. Likewise, the courts held that the federal mark is superior to the state mark. Therefore, except in Mattoon, the big Burger King had exclusive rights to the name nation-wide including Illinois. Thus, by suing the big Burger King, the little Burger King ended up losing the second store in Charleston, forever stuck in Mattoon.
What could have the little Burger King done? First and foremost, the courts said they didn’t use their mark throughout the state. The little Burger King never tried to open a second store until after the big Burger King filed their federal trademark. Had the little Burger King opened some more stores earlier, the big Burger King may not have been able to receive a federally protected trademark or would have been forced out of the state. Secondly, the little Burger King probably should have filed a federal trademark rather than state as the state trademark does not offer much protection as you can clearly see. But really, they should’ve sought an attorney to help guide them through this kind of stuff. Business lawyers know what pitfalls to look for when you’re starting a new business or expanding it and can help prevent you from being stuck in your own Mattoon. If you have questions about your business the smartest thing you can do is seek an attorney today.
If You’re Starting a New Business, Your First Call Should Be to an Attorney
October 9, 2018 – Alec Blalock
The general advice most often given to new business owners is that the two people they need on their team is an accountant and an attorney. The accountant may seem obvious, you need a guy to run the numbers and so few people actually enjoy math. But many times, we see businesses delay in hiring or even consulting an attorney. Again, I can understand that point of view, especially how expensive we can be. How hard can it be to draft a contract? Can’t I just use my best judgement and basic critical thinking skills? Can’t I just hire an attorney if I get sued? This line of thinking may seem like a way to cut costs, but will more than likely cost you more in the end.
First let me get this out of the way, if you’re a business owner without an attorney and you’re currently being sued, it’s already too late. In other words, you done #$%&!@ up. This is because, the point of hiring an attorney to help with your business is to prevent exposing yourself to legal liability. If you’re currently being sued the thing that exposed you or your company to liability already happened. Hiring an attorney is like having insurance, you need one to cover yourself. The earlier you hire an attorney for your business the better. You will want an attorney who truly knows or gets to know you and your business. And early on in a start-up business, an attorney can aid in drafting contracts, avoiding OSHA or Federal Employment law violations, zoning compliance, copyright and trademark advice (naming your company can be a pain) and every and all legal questions you may have. If you’re setting up an LLC, you HAVE to have an attorney. A corporation by law has to be represented by an attorney in court.
Finally, the best reason to keep an attorney on retainer is to do the things you want to do. J.P. Morgan once said, “I don’t pay my lawyers to tell me what I cannot do, but to tell me how to do what I want to do.” If you have a problem, a lawyer’s advice is invaluable. You want to stop employees from stealing business when they leave? We can show you how to do that. You want to expand into a new area or region? We can show you what you will encounter and how to do that. A common misconception about attorneys is that we tell you what not to do, when in reality our job is to tell you how to do it without exposing yourself to legal liability. So, if you’re starting a new business, please, seek an attorney to help you before you get into trouble. It saves time and money.
Why So Many Fan Games and Movies Get Shut Down
September 18, 2018 – Alec Blalock
You’ve seen it before. Some young director decides to make a gritty Power Rangers short or a small team of developers decide to make a Pokemon game. Then the creator or rights holder swoops in and sends a cease and desist letter asking to stop what they’re doing or they’ll be sued. Both examples listed actually happened.
In 2015, Adi Shankar made an original Power Rangers short that went viral until it was shut down by copyright claims, and Shankar was issued a cease and desist letter by Warner/Chappell, the rights holder to the Power Rangers theme song. Likewise, Pokemon Uranium was a fan-made game that included an original region to explore and 150 original Pokemon. It too was barraged by DMCA takedown notices and cease and desist letters from Nintendo’s lawyers. You can no longer download Pokemon Uranium from the creator’s website. Now, one could obviously understand why something that copied every aspect or remade something would be taken down, but why does it happen to things that have wholly original aspects? The answer as you may have guessed it, is copyright and trademark law.
I won’t go into great detail about what copyright and trademarks are, but the basic idea is that copyright protects the owner from someone using their characters while trademarks are supposed to protect the consumer by not allowing other people to use other company’s logos, color scheme, etc. so as to avoid confusion. The latter does have an extra wrinkle to it however. While you may be able to get around copyright as long as the author/creator/rights owner gave you the ok, trademark is a different story. A trademark operates on a use it or lose it situation, and with that the trademark owner must enforce and police their trademark. If a business fails to do so, they risk the possibility of not being able to seek remedies available to them or worse, losing their trademark entirely. It’s this reason Nintendo is very protective of their IP like Pokemon. If they allowed the fan-made games like Pokemon Uranium or AM2R (Another Metroid 2 Remake) a pass then Nintendo will have opened themselves to the possibility of losing those trademarks. And although the characters of Pikachu and Samus Aran are protected by copyright, if the trademark is lost another game company could swoop in and just do exactly what the creators of Pokemon Uranium did. Create new regions with original Pokemon designs and they avoid copyright.
And that brings me to an important point that most people seem to miss about both copyright and trademark: quality control. The reason we allow people and companies to have these bundles of rights is so that they can carefully control how they want their product/characters to be viewed and used. If there was a scenario where Nintendo lost their trademarks there could be a scenario where the populace is inundated by companies making Pokemon games, thus devaluing the brand overall. That’s what was probably going through the minds of the rights holders of Power Rangers when they saw the gritty short by Adi Shankar. Power Rangers is a kid show. And whether or not it was actually harmful, the rights holder probably viewed a more adult take of the characters as damaging to the characters or the brand. I can completely understand the desire to see characters we grew up with seen in a new light or have them grow up with us. I can also understand having it be your dream to make a sequel to your favorite game. But the trouble is that many of these things run afoul of the owner’s copyright or trademark, and (especially in the latter’s case) these things will be enforced to protect their brand.
But there is a bright spot for all you would be creators. Nothing can stop you from creating something inspired by a copyrighted or trademarked property. You can create a Pokemon like game or a Super Sentai (Power Rangers) like show. You cannot copyright an idea. Pokemon Uranium could’ve still been a thing if they didn’t use any trademarked symbols (like the Pokemon name) or copyrighted material (Pikachu, elite 4, Nurse Joy, etc.). The concept does not need to be original. In the 90’s every shooter was called a Doom clone, because the mechanics were identical but none of it ran afoul of copyright or trademark laws because everything else was original.
And if you’re a small business you need to be aware of these laws and your rights. No one wants to lose their trademark and potentially irrevocably hurt their brand. So, if you’re an owner of a small business and you have questions or concerns about enforcing your copyright or trademark, please seek out an attorney immediately to help you through these things and fight for your company’s rights. Enforcing your mark or copyright is a tall order for just anyone to do and you will need someone with specialized knowledge and skills to help you monitor how your property is used.
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