October 11, 2012
By Oliver Herzfeld, Forbes Legal Corner
In response to Andy Warhol’s 1962 series of paintings of Campbell Soup cans, the product marketing manager for Campbell Soup Company famously wrote a letter to Warhol expressing the company’s admiration of his work. In the absence of such a positive approach, could Campbell Soup have successfully claimed infringement of its intellectual property or demanded that Warhol procure and pay for a license? Alternatively, would Warhol’s First Amendment right of artistic free expression for unique original works of art obviate the need for a license? These issues were recently addressed in an 11th Circuit Court of Appeals decision regarding a long running dispute between the University of Alabama and the artist Daniel Moore. Moore has been painting realistic historical scenes involving the University’s Crimson Tide football team for more than 30 years. He also reproduced his works on mugs and other articles of merchandise pursuant to a dozen license agreements between the parties. In 2002, a dispute arose where the University claimed Moore must procure a license and pay royalties for all of his paintings, since they incorporate the University’s trademarks. Moore contended that the First Amendment protected his right to paint historical events and that no license was required for his paintings or any other products unless the University’s trademarks appeared outside of the “image area” of his original works (e.g., on the border or packaging of products).
The License Agreements On appeal, the court first looked to the parties’ license agreements, but found them ambiguous. For example, although the University’s license agreements’ definitions of “licensed indicia” are broad, they do not explicitly include the University’s uniforms including their designs and colors. The Agreements repeatedly refer to products “bearing” the licensed indicia and the licensed indicia being used “on” products, which makes sense in the context of articles of merchandise but not uniforms depicted on paintings. And the agreements require trademark symbols beside all licensed indicia which, under the University’s interpretation, would unrealistically require a circled “R” or “TM” in superscript beside every player’s uniform in Moore’s paintings.
Trademark Infringement Versus First Amendment Rights With the license agreements failing to resolve the dispute, the University alternatively claimed that the inclusion of the University’s football uniforms in Moore’s paintings creates a trademark infringing likelihood of confusion that the University sponsored or endorsed the paintings. In addressing such claim, the court followed prior rulings of other federal circuits in applying a balancing test where the U.S. Trademark Act is narrowly “construed to apply to artistic works only where the public interest in avoiding consumer confusion outweighs the public interest in free expression.” In applying the test, the court concluded that Moore’s realistic paintings of historical Crimson Tide football scenes are embodiments of artistic expression protected by the First Amendment that do not violate the University’s trademark rights.
Articles Of Merchandise
Moore argued that if his paintings do not infringe the University’s trademarks, and he owns the copyrights to such works, he should also have the right to produce other products (i.e., “derivative works”) featuring his artwork including mugs, t-shirts, flags and other articles of merchandise. The court disagreed with that argument stating “[i]f it were otherwise, a person could easily circumvent trademark law by drawing another’s trademark and then placing that drawing on various products with impunity. Selling the copyrighted drawing itself may not amount to a trademark infringement, but its placement on certain products very well might.” The court remanded such issue to the district court, and I believe such court will find that, unlike Moore’s paintings, other articles of merchandise featuring the University’s trademarks will indeed require a license.
The Lesson For Licensors The court’s refusal to resolve this dispute based on the parties’ license agreements is a wake-up call to licensors to avoid simply filling in the blanks of generic form trademark license agreements. Instead, licensors would be well advised to engage legal counsel with significant experience in licensing to appropriately draft the terms and conditions of each agreement based on the specific circumstances of the proposed transaction. Particular attention should be paid to the definitions of the licensed marks, licensed articles, licensed territory, permitted distribution channels, contractual term, and any exclusions or limitations thereto.