IP Mastery for Entrepreneurs with Julie King: Trademarks, Patents, and More Julie King

The legal world is buzzing about AI and its use for all kinds of things, including generating logos, text, and other things people would normally want to register for copyright or trademark protection. I'm particularly nerding out over these issues, because my master's degree project involved training of artificial intelligence systems. Rights to AI-generated content, and to content made on creative platforms, aren't always easy to understand, and they have a big impact on how you can use it and if and how you can protect it.

There's no doubt AI is incredibly useful for generating content, though there is still no substitute for a real human author or artist. But what rights do you have to what it creates for you? Can you use it in the ways you want to?

Keep in mind the generators are trained on existing material, including things that are protected by copyright and trademark law and registration and patents. There have been some court decisions on this precise topic, but the law is not completely settled. However, there are some certainties and principles of law that can guide you.

AI-assisted programs, like online logo generators, aren't straight AI tools like ChatGPT. Instead, they provide templates tweakable using AI. If you're using an online logo generator, such as the one in Canva, a very popular online program for creating all kinds of visual projects, or Logo.com, you need to look at the license terms of the software. Canva and other logo generators are licensing the use of their product and the generated logos in it to you. You'll almost certainly see language that says you cannot apply for copyright or trademark registration for those logos, and that Canva and whoever they licensed the clip art, photos, etc. used in those generated logos retain the ownership to that original art and do not give you a license to use it exclusively. Even when you make a "new" creation with those elements, they still belong to Canva and/or whoever licensed them to Canva.

I made a logo for Bob's Burgers for selling burgers on Tailor Brands' logo maker website. Their terms say I own full commercial (note they don't say "exclusive") rights to it and can apply for trademark registration for it (through the, naturally, even though they aren't lawyers and will just copy whatever you provide them into the application and submit it whether it's appropriate or not). Well, they're right, I can apply, but registration surely won't be granted. For starters, Bob's Burgers is already a trademark belonging to someone else. Second, they had me pick one of 20 graphics for use as part of the logo. That means in no way is that graphic element going to be unique to my logo. The lack of exclusive rights here is fatal. These generators also don't address other issues that can lead to refusal to register a trademark. usually you won't be given the rights needed to have ownership or apply for registration, but even if you are, your logo could still be refused copyright and trademark registration for other reasons.

If you use another kind of AI tool to create a logo, like Canva's AI tools or DALL-E, the platform doesn't claim any ownership rights, including copyright ownership, to the output. That doesn't mean you're in the clear for ownership and registration, however. Some of the elements in the output may be identical to or similar enough to work made by others that it would be infringement to use it without proper credit to and licensing from them.

Copyright
I asked DALL-E to make some logos for me for use in this post. I've seen enough stock graphic elements when doing trademark and copyright searches to know that the crown elements and scales of justice elements are likely to be highly similar to or identical to crown and scales designs owned by Getty Images or some other entity or artist. That means not only is it possible I do not own exclusive rights to those elements, it is also possible I would be infringing if I use

https://youtu.be/6cFVLWV0ZI4






This is part one of a 10 part series on Essential Benefits of Trademark Registration. This week, the topic is Avoiding a Busted Brand: Preventing the Pain of Forced Rebranding through Trademark Registration.


I'll be talking about five painful problems that can happen for your business when you don't take the correct steps to develop your brand, and how to avoid those problems or get started in handling them.


Imagine you've been using your business name, logo, or slogan for several years, building a good base of local customers. You make moves to expand your market, and suddenly you get a cease and desist letter from another business that has better rights to the trademark, or you go to file an application for federal registration, and the search to identify any possible problems uncovers an identical trademark for similar goods and or services, meaning there's no way you'll get your application approved.


What was a time of exciting expansion has now become a horrorscape of being forced to rebrand. Rebranding is painful enough when you want to do it and plan for it. Being forced to do it quickly on someone else's timeline can be disastrous.


Let's get into the top five painful issues involved with forced rebranding.


1. Financial Cost

Rebranding can be a significant financial burden. Without even going into the possible loss of business that can come from rebranding, costs of rebranding include having new logos designed, having new marketing materials designed, updating signs, changing packaging, updating websites, and potentially launching marketing campaigns to reintroduce the brand to the market.


That's a lot of expenses, and they can add up to tens of thousands of dollars. Even if you're just starting out or handle all those things yourself, that's going to cost you in terms of hours you won't be able to spend working on the core of your business, or extra hours at the expense of your personal time with your family and friends.


2. Loss of Brand Equity

Rebranding means letting go of the brand equity that the previous brand had built over time. Your brand is what people associate with the service, quality, and trustworthiness of your business. Those things are crucial to a business, and they don't get associated with a brand overnight. It takes hard work and countless hours. Once the traits you want associated with your brand have been established, They create customer recognition, loyalty, trust in new offerings, and referrals from existing customers. It takes a while for that to rebuild when rebranding happens.


Sometimes it works fairly quickly, like when Facebook renamed its parent company Meta, with Facebook remaining as the name of just the part of the company handling that social media service. Or when Kentucky Fried Chicken changed to KFC. But more often it takes a very long time, like when Netflix re branded its DVD by Mail Services as Quickster, which caused the company's stock to fall, and Netflix put the mail service back under the Netflix name. So that failed completely. Or when PricewaterhouseCoopers briefly changed its business consulting branch's name to Monday, which just confused people and had none of the connotations of experience and quality the original name had.


Loss of Brand Equity Can Create Confusion

Loss of brand equity can create confusion among consumers. A sudden and significant change in brand identity can confuse existing customers because they might not immediately recognize the new brand, leading to a temporary drop in customer engagement and sales, like what happened with Netflix. This confusion might also push consumers to competitors who still have a familiar brand.


Loss of Brand Equity Is Loss of SEO and Online Presence

Loss of brand equity is also loss of SEO and online presence. If your old brand had established an online presence, changing to a new brand can at least tempo

https://youtu.be/P0L4-naDotk






Why do you need an operating agreement for an LLC? An operating agreement is not required by law in Illinois, but you're doing yourself a disservice not having one. They're important for banking and financial transactions. They set up a roadmap for avoiding problems and for handling ones that do arise, and they help keep good relationships between owners good.


How do they help with money? Often banks will require an operating agreement in order to open a business bank account for the LLC.. Banks will almost always require an operating agreement when the LLC is taking out any kind of loan. If you ever sell the LLC, the buyer will want to see the operating agreement so they know they're dealing with the correct representatives of the business with authority to do the transaction.


This goes when someone is wanting to join the LLC as a member as well. They're going to want to see who the right people to deal with are, and they're going to want to see that everything is in order as it should be.


So how do operating agreements help prevent problems with operating the LLC? A good LLC operating agreement is a good plan. It will address things like:


what kinds of decisions need to be voted on;

what kind of vote is needed to approve certain things - maybe taking out a loan needs a simple majority or two thirds vote, whereas bringing on a new member requires a unanimous vote;

how to handle tied votes;

what to do when an owner wants to leave the business, dies, is incapacitated, or the other owners want to kick them out;

how and when to bring in additional owners;

what rights investors have;

which role is generally responsible for which duties;

how profits and losses will be shared;

how things will be handled if the business must close; and

more.


A good operating agreement will set forth how to handle all those things and more so there is an easy roadmap for LLC members to follow and not end up lost in disagreements and hard feelings.


So, you're spouses, best friends, et cetera, you don't think problems like that will happen for you. It would be wonderful if that turned out to be true. Statistics, though, show that good relationships and intentions at the beginning aren't enough, and that it doesn't take much for them to turn sour.


I've personally handled cases where former best friends were at each other's throats when one decided to end their LLC, and their operating agreement was something they got off the internet that didn't have any provisions for ending the LLC. It took months to resolve, each side paid a tremendous amount in attorney's fees to come to a settlement agreement, and the friendship was permanently destroyed.


I had another case where siblings running a long time family business ganged up on another sibling and kicked her out of the family business so they can implement some shady business practices. The entire family was ripped apart, with members of the family taking sides. That damage was permanent, and again, it took months to resolve, and the only ones who came out ahead were the attorneys who got paid to negotiate a settlement.


An operating agreement may seem like an expensive investment when starting an LLC, especially if you've already been running the business without one and without trouble.


Statistics show only 25 percent of businesses last for more than 15 years. Even those that have lasted that long have their fair share of unexpected problems. It's not a smart gamble to go without an operating agreement to handle those problems or to help if you're not in that 25%. And a good operating agreement can help you be in that 25 percent who survive.


It's true, a good operating agreement is not cheap. The cost of not having one, though, can be exponentially higher, both in actual cost and the cost of once good relationships that turn permanently sour.

https://youtu.be/xW0mph7iYzo






This is the second in a series about the essential benefits of having your trademark registered. One of the most compelling reasons to register a trademark is the group of exclusive rights it confers upon the owner. 


Common Law Rights

Without registration, there are some trademark rights that are called “common law” trademark rights, but those rights are limited.


They can be limited to a small geographic area.

You can't use them to bring a lawsuit for infringement in federal court and often not in state court. 

U.S. Customs and Border Protection can't use them to stop importation of infringing goods.

You can't use that ® symbol with them; you can only use the TM symbol. 

It's not as easy for others to find records of your use, so conflicting use of others is more likely.

There's no legal presumption you are the proper owner of the trademark rights. 


State Registration

What about state business registration?  The registered organizational documents for a corporation limited liability company, partnership or other entity don't protect your business name as a trademark. That's right. They do not offer any trademark protection. Most states don't check their own trademark registry, let alone the federal registry, when registering a business formation. They may reject a name because it's identical or too similar to a business already registered in the state, but that's only in their list of existing businesses, not even in their own list of registered trademarks.  For example, Illinois might register an LLC with the name Apple, but that wouldn't give the owner any trademark rights and would obviously be an infringing name under many circumstances.  


What about state trademark registration?  It's a good tool, and under certain circumstances, it's the only kind of trademark registration available. Usually state registered trademarks provide the right to sue in state courts regarding infringement and allow a victorious party to receive certain financial damage awards in addition to forcing the other party to stop infringing, including attorney's fees most of the time. Suing for infringement without registration doesn't allow the extra financial recovery and is much harder to prove. 


State registration of trademarks only confers the benefits of registration in the state in which the trademark is registered.  Sometimes it doesn't even confer those benefits throughout the entire state if the mark is only used in a certain part of the state. For example, in Illinois, if a mark is in use in Chicago, that doesn't necessarily give the owner rights down in Southern Illinois near Carbondale, and vice versa. 


If you're engaged in regional or national business using your trademarks, that local, regional, or state level of protection is insufficient, and it's cumbersome to register and maintain trademarks in multiple states.  Also, states don't usually search the federal register of trademarks, so they can and do grant registrations that infringe on a national brand.


State registration is appropriate, though, if you are using your trademark only within a particular state. In fact, if you aren't using it outside of that state at all, you can't get federal registration. However, There are many ways your mark may be used in what's called “interstate commerce” despite your business being located only in one state. It’s important to consult an attorney about whether your use qualifies for federal registration.  It's also a really good idea, even if you're only applying for state registration, to have your attorney do that thorough federal search, to make sure that your state registration doesn't end up being essentially useless because there's already a mark registered federally that's similar or identical to yours for similar identical goods and services.  


Federal Registration

All of this leads us t

https://youtu.be/D22OfUhG-AE






In this episode, we're going to plunge into the eerie and tumultuous world of trademark lawsuits surrounding the iconic “Evil Dead” film franchise.


Join us as we navigate the macabre terrain of legal battles and the undead.  “Evil Dead,” the brainchild of director Sam Raimi, first graced the horror genre in 1981. The tale of a cursed book, demonic forces, and a chainsaw wielding hero, Ash Williams, became a cult classic and established the franchise's dark legacy.


But beyond the screams and gore, the “Evil Dead” series has also seen its fair share of legal turmoil.  One of the most notable trademark lawsuits  One of the most notable trademark lawsuits regarding the film series occurred in 2018 when Renaissance Pictures, the production company behind the franchise, filed a lawsuit against Award Pictures Incorporated. Award Pictures had released a film titled “Evil Dead,” claiming that it was a public domain movie unrelated to the original franchise.


Renaissance Pictures vehemently disagreed, arguing that the title and marketing of the film misled consumers into thinking it was a legitimate “Evil Dead” installment.  Renaissance Pictures also needed to take action against this film name because one of the things you have to do when you have a trademark is police it, which means that you have to take action to stop infringement by other parties.


And if you don't, you can actually start to lose some of your rights.  This lawsuit was a fierce battle between the two parties, with Renaissance Pictures seeking to protect the “Evil Dead” trademark and maintain its rights over the franchise. In the end, the court ruled in favor of Renaissance Pictures, emphasizing the potential confusion among consumers and the potential harm to the established franchise.


The “Evil Dead” trademark lawsuit serves as a reminder that the world of intellectual property is not immune to the forces of darkness. The franchise's enduring popularity has made it a target for those looking to capitalize on its name.


In the end, the chainsaw wielding spirit of Ash Williams, along with the legal guardians of the “Evil Dead” franchise, continue to fight against those who seek to exploit its legacy.


If you'd like me to do an episode on any other horror-related trademarks, send me a suggestion and I'll see if I can concoct a twisted tale for you.

https://youtu.be/wawiSnkjIZM






In this episode, not for the faint of heart or stomach, we journey to the heart of Texas and confront Leatherface,  the chainsaw wielding maniac from “The Texas Chainsaw Massacre.”


In the backwoods of Texas, Leatherface donned a mask made of human flesh and wielded a chainsaw with gruesome intent.  “The Texas Chainsaw Massacre” franchise created a world of horrors with Leatherface as the embodiment of terror. His grotesque appearance and relentless pursuit of victims left an indelible mark on the horror genre. The film franchise has left an indelible mark in the USPTO trademark database. 


Vortex is the company who owns a multitude of Leatherface trademarks. Most of them are still alive. The ones carved up and dead include marks for guitar picks, calendars, postcards, and posters, and amusement parks. Why? Some, like the posters, were because they were deemed merely ornamental.


Like the face of someone else worn by Leatherface himself, the marks were considered just decorative, not a brand identifier on those goods. This is a terrifyingly common issue with things people want to try to register as trademarks. Images and slogans on T shirts, hats, mugs, posters, etc. are considered ornamental or merely decorative by the USPTO.  


To function as a trademark, the image or words would need to be on the tags, packaging, the website store, something that shows it's a brand or source of goods or services. That means much of the swag you get with company logos is usually not covered by trademark law. It just can't be registered as a trademark for things like that.


Copyright law can sometimes protect these things, but not trademark law. The words “Texas Chainsaw Massacre” printed on a Fruit of the Loom sweatshirt don't show “Texas Chainsaw Massacre” is the brand behind the sweatshirt. Rather, it would be Fruit of the Loom.


Vortex also owns a grisly collection of dead “Texas Chainsaw Massacre” trademarks. Some of these have been cast aside like a pile of bones. Like Leatherface failing to catch the final girl, the video game never caught on, so Vortex couldn't show use of the mark with the video game. It seems like a shame the cosmetics didn't catch on. Leatherface knew the power of makeup for putting up lifeless skin, but apparently no one wanted his beauty products. Apparently the leather and imitation leather bags weren't a hit either. Maybe people wondered where the leather came from.


The applications were worth filing, though, if the company truly thought they'd use the marks for those goods. You don't have to wait until your mark is in use to file, and there are some good strategic reasons you may not want to wait. It's a great thing to discuss with a trademark attorney. 


Remember that refusal for Leatherface for amusement park services? The USPTO did approve the “Texas Chainsaw Massacre” mark for that because that mark functioned as a brand, a source of things, not just an identifier of a character that would be featured at an amusement park.


My favorite refusal related to this franchise, though, is for the phrase “Texas Chainsaw” as it relates to a bunch of different kinds of toys. The examiner said that Texas is just descriptive of where the toys come from, because the business is based in Texas, and that chainsaw is merely descriptive of the type of toy, despite none of the toys listed being chainsaws (they're more like board games, dolls, masks, vampire teeth, and the like).  That examiner needs to brush up on their pop culture from the last five decades.


It's not uncommon to get weird refusals like that. We trademark attorneys do our best to argue against them, educate the examiners, and make a great case for the mark proceeding to registration. 


Do you remember that gas station from the original movie? Of course you do. Well, the owners got sued in  2022 for trademark infringement becau