Double check before you start building a brand you don’t actually own. To be protectable, a business name has to be distinctive. To read a case study on the types of terms considered distinctive, please visit the latest issue of Valley Business Front June [PDF link].
The yellow arches, the green and white mermaid, the white script on the red can. You probably can match these descriptions to the brand — and this immediate recognition points to brand and logo strength. Oftentimes, in fact, your logo is your brand. But is it really your logo? In fully developing this core part of their consumer identity, many businesses miss some basic steps they should take to avoid a situation where logo ownership is in jeopardy.
Part of determining who owns the interest in the logo design itself depends on the capacity in which the designer completes the logo development. Most people and businesses look to hire a graphic designer for a one-time project-based job for which they intend to pay that designer a lump sum. Upon making payment, that person or business then owns the work, right? Nope. That’s a copywrong. You see, simply making payment for the logo doesn’t confirm or clear up ownership or associated rights (and limitations).
One step in determining ownership of the logo developed by the designer is to ask whether it is a work made for hire. A work made for hire, under The Copyright Act, is defined as either “(a) a work prepared by an employee within the scope of his or her employment”, or (b) a specially commissioned work (as in the case of a graphic designer hired for a discrete project) in a number of enumerated categories if reflected in a written agreement signed by both parties. If the design work was not completed by an employee, then the work is potentially a work made for hire, but only if the specially commissioned work falls into one of the enumerated categories and the parties have signed a written agreement stating that the work will be considered a work made for hire. If the work is not a work made for hire at all, as with an independent contractor whose specially commissioned work doesn’t fall into one of the categories required under the Act, an explicit written copyright transfer agreement is required to transfer ownership in the logo design from the designer to the person or business for whom it was created.
Many start ups begin with limited finances, forcing them to consider what they can and cannot afford at any given stage in development. While most small businesses and start ups question whether they can afford to pursue trademark registration as part of their brand development, what they cannot afford is to wind up on the wrong side of litigation for failing to fully explore on whose turf they may inadvertently be treading. It is easy for businesses of all sizes, whether starting up, re-branding, or expanding their growth into other areas of development, to unwittingly adopt a brand already in use by another business. Learning what, or who, is in a name is a step in the start up process that most cannot afford to skip.