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License to Decorate
In a litigious society, it’s important to know the law
BakeMag.com, April 13, 2010
by Baking Buyer Staff

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Last year, Rick Boone of Rick’s Bakery in Fayetteville, AR, was sued by the University of Arkansas for trademark infringement.

The bakery was using a red hog on some products—an act they didn’t consider “copying.” They were also using the phrase “Go Hogs!” and the word “razorback.” All of which—Boone would soon come to find out—are registered trademarks of the university.

The university’s registered trademarks include any razorback marks or images, the words “University of Arkansas,” “Arkansas Razorbacks,” “Arkansas” and “Hogs,” and the cheer “Wooo Pig Sooie!”

Production of razorback products was halted for 6 to 8 months while the bakery and university sorted out the infringement charge. All charges were dropped when it was determined that the bakery was not maliciously or willfully copying the trademarks, and Boone applied to be a licensee of the University of Arkansas. Today, the bakery is the only officially licensed University of Arkansas bakery in the state and sells around 30 approved razorback products.

The licensing process cost Boone a couple of thousand dollars, which was less than expected. And 10 percent of all University of Arkansas sales go to the university for royalties. Cake decorators only use images that are pre-approved by the university.

The snafu with the school hurt Rick’s Bakery sales for 2009, but Boone is confident that sales will return now that the bakery is an official licensee.

Cake decorating and Intellectual Property
The new year is a wonderful time to examine your business’ marketing strategies, offerings and décor—but don’t overlook the legality of your cake decorations.

If you are piping popular movie characters onto cakes, reprinting copyrighted pictures—or serving products with logos from your local high school or university—you might be inviting litigation into the bakery. It doesn’t matter if you are a small bakery, a supermarket or an at-home baker. If you sell a cake with a licensed character that was not purchased from a licensee, it is illegal. It’s safe to assume that every movie, television or popular book character has been trademarked by its source. When it comes to cakes, bakeries need a license to decorate.

According to the International Trademark Association, a trademark license is an agreement between the trademark owner and another party—the licensee—that permits reproduction and sales of the trademarked good. Cake decorating companies such as Bakery Crafts, DecoPac and Lucks are licensees. Their licensing agreements protect bakers from trademark infringement.

When dealing with licensed characters, there are two main options: cake-decorating kits and edible print-outs. Fleckenstein’s Bakery in Mokena, IL, uses DecoPac’s print-on-demand PhotoCake system. The system is a licensed-character catalogue for edible print-outs.

Bakeries pay per print. Ray Fleckenstein appreciates the print-on-demand system because at any time, he can handle requests for any licensed character sold by DecoPac.

The law determines infringement by evaluating the “likelihood of confusion” concerning the source of the good. If, for example, you reproduce and sell the character Shrek without consent from DreamWorks Animation or without purchasing Shrek from a licensee, your customer may believe you own or created the character. But there are a lot of tricky customer requests—especially if your customer does not want their cake decorated with a kit or edible print-out.

Grooms cakes, says Rick Boone, are often tough to handle. Many brides seek 3-D cakes in the likeness of Star Wars characters or other movie legends. To handle such requests, Boone goes straight to the movie studio to receive permission for the one-time use of a licensed character, such as Yoda. The approval process usually takes a few weeks, he says, so be sure to plan ahead.

Trademark and Copyright Scenarios
To further understand trademark and copyright law, Baking Buyer spoke with Intellectual Property expert Dr. Irene Calboli, associate professor of law at Marquette University Law School in Milwaukee, WI. Listed below are possible scenarios in which trademark or copyright issues could arise in the bakery. According to Calboli, none of the information provided below should be considered legal advice, and answers are given in the hypothetical.

Calboli says that the Intellectual Property laws relevant to bakery include copyright, trademarks, and possibly, the right of publicity. The right of publicity includes a person’s right to control their likeness for commercial use. There is no clear-cut ruling on the right of publicity, so it is important to check with your state before using an actor or celebrity’s likeness on a cake. “It depends very much on the state,” says Calboli. “California is very strong on that; other states don’t care.”

Trademark infringement, says Calboli, only exists if there is “willful infringement.” This is so because trademarks are designed to protect against competition. “If you get alerted and keep doing it,” she says, “it can be qualified as willful infringement.”

Copyright infringement, however, can occur no matter if it is willfully done, because copyrights protect personal property.

Calboli says that although she cannot be specific about the possible penalties for copyright infringement, they may include financial damages or seizure of products. It is unlikely, she says, that the case would go so far. Often, litigation leads to a licensing agreement for use of the good.

Scenario 1: A bakery allows customers to bring in personal photos for use on photo cakes. One photograph includes a toddler holding a giant Elmo stuffed animal. Can the bakery legally reproduce this image?
“My answer is, most likely, yes,” says Calboli. “And the reason is that first of all, there’s no problem in the copyright of the picture. Because if I took the picture, that’s totally up to me to do any type of copyright distribution that I want. So the bakeries would have no problem.” There is, in essence, no commercial purpose to the photograph.

Calboli states, however, that if a customer were to bring in the photocopied page of an Elmo coloring book, it would not be OK to reproduce the page on a cake. The photocopy would be considered a non-authorized, infringing copy of a copyrighted material.

Scenario 2: Can a bakery legally reproduce a copyrighted photo, such as a senior or team photo?
If the customer signed an agreement to purchase the photograph and the copyright, it is fine to reproduce the image on a cake. But, says Calboli: “If I didn’t buy the copyright, and I didn’t get a license from the contract clearly stating that I can reproduce it, at that point, the best idea would be to go back to the company that has the copyright and try to ask for permission.”

Scenario 3: A bakery purchases Barbie dolls for use in their Barbie doll dress-cake. Can the bakery legally sell these cakes?
“No, that might create a problem,” she says. It is possible that a court would rule that Barbie is a modern icon, and therefore it is OK to use her likeness. But, to be on the safe side, your bakery should not purchase Barbies and use them in a commercial venture.

“If the customer brings in their Barbie doll,”says Calboli,”that’s different. You are just saying, personally, ‘Can you put a skirt on my doll?’”

It is also OK, she says, for bakeries to give away unopened Barbies with the purchase of a cake.

Scenario 4: Can a bakery use artistic license to free-hand a drawing of a licensed or trademarked character onto a cake?
“It depends,” says Calboli. “It would go to the test of substantial similarity.” Calboli says that if a baker were to free-hand characters on a multitude of cakes, that act would likely be considered trademark and copyright infringement.

It is important to realize that some characters, such as Mickey Mouse, carry both trademarks and copyrights.  
 
What is Intellectual Property?
In the United States, Intellectual Property falls into three categories:

Patent: A property right granted by the U.S. government that excludes others—for a time—from making, using or selling an invention.

Trademark: A protection on words (and phrases), names, symbols, colors and sounds. Trademarks indicate the source of a product, and they can be renewed forever. Example: the Shrek franchise; Earmark: ™ for an unregistered trademark (this may be used regardless of registration with the U.S. Patent and Trademark Office) or ® for a federally registered trademark.

Copyright: A protection on authored, expressed works—writings, music and art. Copyrights are good for the life of the author plus 70 years. Example: photographs; Earmark: ©

Source: United States Patent and Trademark Office


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