Brand Clearance: Do you have permission to use your name and logo?
When it comes to business, entrepreneurs are influenced by all sorts of forms of entertainment. In fashion, cloth companies regularly collaborate with entertainment companies to bring consumers the crossover we all want and need. From Nike collaborating with Viacom to bring a Kyrie Irving and SpongeBob crossover to KITH partnering with Disney to bring a Kith and Mickey Mouse crossover. In the restaurant business, we have Bubba Gump Shrimp from Forest Gump and Cheers from the tv show Cheers. These crossover collaborations are negotiated for and brought together through license agreements. The entertainment company will grant the business the right to use its copyrights and/or trademarks on their clothing generally in exchange for royalties on sales.
So, what happens when you don’t secure a license agreement with a company before using their valuable trademarks and/or copyrights? The short answer is expensive litigation. In 2016 an investment group in Houston tried to open a restaurant called the Krusty Krab, which of course is the famous restaurant in the show SponegBob Squarepants. Viacom, who owns the rights to SpongeBob, sued the group for trademark infringement claiming ownership of the rights to Krusty Krab.
Despite Viacom never using the Krusty Krab mark in real life for a restaurant, the court found in favor of Viacom. The Krusty Krab was in 80 percent of the shows episodes and was featured on licensed products that had the name “Krusty Krab” on them. The owners of the investment group invested into this project, including attempting to register for the trademark rights in Krusty Krab.
Another example is the famous fashion designer Marc Jacobs and the band Nirvana. Nirvana created their now famous smiley face logo in 1991. Since then, the smiley logo is routinely associated with the band and has become famous alongside the band. In 2018, Nirvana brought suit against Marc Jacobs for creating a shirt with a very similar version of Nirvana’s famous smiley logo. Marc Jacobs changed the two x’s in the Nirvana logo to an “M” and “J” and altered the shape of the smiley face slightly. Last week, the U.S. District Court for the Central District of California allowed Nirvana’s case against Marc Jacobs to proceed on grounds of copyright and trademark infringement.
Over the past three years, nearly $430 million dollars have been lost on trademark filings alone. Clearing and securing your trademark rights is one of the most important aspects of your business. Before moving forward with your business ideas and launching a brand, you should consult with an experienced trademark attorney. At Rational Unicorn Legal Services, we provide comprehensive clearance searches to ensure you receive the best advice on how to avoid a Krusty Krab or Nirvana situation described above.