Intellectual property remains the core money making ingredient for bands in the music business. Many assume intellectual property simply refers to filing copyrights, but this is only a fraction of the overall equation. For bands, the real money flows when they control both: copyrights and trademarks. What is a trademark (aka – the mark)? Why are they important for bands? How do you squeeze money out of a trademark? All you really need to know is that a trademark can become a groups most powerful negotiation tool and when used properly, the trademark can churn more money then music alone.
When you hear the term “intellectual property” it essentially refers to the BIG 3: copyright, trademark, and patent. Other components exist as well, such as trade secrets, trade dress, service marks, etc. but for the sake of discussion we’re going to stick with the BIG 3.Patents relate to formulas or inventions and are irrelevant for discussion here. Copyrights refer to an original work of authorship fixed in a tangible medium of expression. Boring legal mumbo jumbo so just know that a band’s recorded music, when filed properly, is protected via the copyright. Because most recording artist understand the legal significance of a copyright, we’ll focus on the remaining component – trademarks. Trademarks are any unique symbol, design, mark or words that distinguish the product from others on the marketplace. For example: Nike’s swoosh, Coca Cola’s traditional font logo, the leaping puma for PUMA, The Recording Academy’s gramophone logo, McDonald’s golden arches, etc. How is this relevant to the music business you ask? Imagine if U2 couldn’t legally use the symbol U2? Their music would be seemingly worthless if it wasn’t coupled with the symbol “U2.” What if Island Records had to pay a licensing free to a third party every time they printed the palm tree logo on a disc? What would happen if Aerosmith didn’t legally own the mark associated with the band name? Believe it or not, trademark battles are fought everyday on the front lines of the entertainment legal community. These stories rarely get attention mainly because higher visibility equates to higher licensing fees for the infringed user. In this regard, the person infringing wants to handle trademark infringement matters quietly and quickly. The mark owner wants to sit back and collect licensing fees and/or out of court settlements by not drawing attention to the matter in hopes others will infringe as well. Nonetheless trademark carnage is an everyday occurrence and unfortunately bands usually spill the bloodshed. Rarely do groups understand the importance of owning a trademark (much less the filing process) because labels like to keep the significance and worth hush hush. Well it’s time to shed some light on the topic so indie and major artists have a complete understanding of where the money is hidden and bodies buried.Instead of pounding the importance of a trademark let’s play out two real life scenarios.
1. Twenty years ago a small band out of Louisiana, United States hired an attorney at our firm. Gigs pretty much consisted of college dates and dingy bars. The group had a catchy name (which will remain confidential), and upon our attorney’s recommendation the group registered their trademark (i.e. band logo & band name). A year after filing, their trademark popped up in Billboard Magazine as advertisement for a label operating under the same name. The problem was the label didn’t own the rights to the name, the band did. A member of the greatest boy band in U.K’s history started the label, but even that level popularity can’t trump the law. The label gained success, signed bands, and released product all under a mark that they didn’t legally own. The rightful owner of the mark, a small no-name band from Louisiana, was able to settle outside of court for a substantial sum of money. The alternative for the infringing label was to drag through federal courts, have the case highly publicized and still lose their shirts at the end of the day. Settlement, even a high priced settlement, was the best option. The no name regionally touring band struck gold, essentially pocketing more money by owning a trademark as opposed to performing and recording music.
2. In 2009 I began representing an international group who had just completed a U.S. tour run from 2008. The problem with the tour was they generated a lot of visibility and success, all while operating under a band name they didn’t legally own. Other groups began calling their band they same name, and to make matters worse the copycat bands contacted the same venues in which my client had played shows. Most of the venues booked the group under the assumption it was my client. Wrong. Even worse, one of the copycat bands eventually got a record deal. My client’s band name became so diluted by untalented copycats that they had to change the band name and literally build a new fan base from scratch. If they had registered a trademark they could have filed lawsuits against the copycats or issued cease and desist letters so they couldn’t perform under the same name.
Owning a trademark essentially becomes a band’s battering ram with negotiations, touring, and product. The owner of a trademark can limit the use of the mark. If a promoter or third party wants to print posters, T-shirts, and other merchandise product – guess what – they must first acquire a license to use the mark. Should a label offer a group who owns their mark a recording contract, the groups got all the leverage. Oddly enough, labels forget about the importance of a trademark. How successful would a Lady Gaga album be if Interscope didn’t have authorization to use the name/mark “Lady Gaga” Umm not very successful. To salvage such a deal a label would have to pay a licensing fee to use the mark. Merchandise rights are the same way.With 360 deals becoming commonplace, what was once “standard” contractual language has shifted, often leaving out verbiage which would transfer ownership of a trademark to the label. With the rise of international music markets/touring/and festival dates, trademarks take on new meaning. Should an album be released in Germany, Japan, or Norway, who owns the trademark? Who’s authorized to use the trademark? Knowing how to file for a mark, where to file for a mark, and how to use a mark should build its way into developmental discussion in order to assure bands have the proper business foundation to maximize their income streams.