One of my favorite comedies from the last century is Spaceballs, the Mel Brooks spoof on Star Wars. As the lead characters, Lone Starr and Barf, rescue heroine and damsel-in-distress Princess Vespa, they come across the stock sage character, Yogurt (played by Brooks), who teaches our protagonists about the all-powerful Schwartz. At one point, Yogurt talks about a sequel, “Merchandising is where the real money from the movie is made,” he says.
Sarcastic as his movie and character may be, Brooks tells the truth in this line. In the case of the original Star Wars, which was the first film to truly create merchandising, George Lucas passed up a $500,000 director’s salary for his licensing rights to merchandize the franchise, and subsequently made more than enough to fund Skywalker Ranch and his own special effects studio. Since then, it has been consistently one among the top 5 licensed toy brands in the world, and was sold to Disney in 2018 for over $4 billion.
Broadcast Companies and Licensing
Licensed merchandise is an important aspect of the value for a brand. When I worked at 20th Century Fox, every time a new project launched, the trademark team that I worked with was responsible for filing applications to register almost every product we could for that brand – calendars, pajamas, jewelry, toys, DVDs, video games, socks, mousepads – you name it. Fox, or a subsidiary company that it worked with, always intended to sell branded merchandise to promote the film or TV show to their audiences.
But what if you’re not a broadcaster, or worried about licensing. Do you need to register your mark to use it for merchandising for your own business?
How Will You Use The Mark?
Most often, businesses want to put a mark on apparel for staff to wear. Some may plan to make tote bags, key chains or water bottles to give away to potential customers. In each case, these items, intended for generating brand recognition, are known as promotional goods.
Promotional goods can also include items for sale where the mark is displayed on the front of a t-shirt or sweatshirt, on a grocery bag or even a travel mug. Even though the item is sold to customers, this is not considered use as a trademark, or use in commerce. Such use is called ornamental use and usually does not rise to trademark protection.
If ornamental use is your only intended use for a design, it is not actually considered a trademark. Without use as a trademark, there is no basis, and therefore no need, for an application for registration. Even better, that design is less likely to infringe the rights of a third party, since the use is not “in commerce” or “as a trademark.”
Protecting Your Mark
It’s important to note that promotional use does not create common law (unregistered) rights in your mark in connection with those items. A mark can still be protected under common law for specific goods, but only if certain requirements are met.
For a business, the technical differences between “promotional use” and “use as a trademark” may seem confusing. In the field of trademark law, however, these terms have very specific meanings. Failure to use a mark correctly can prevent your business from obtaining trademark registration or cause you to lose your rights.
If you want your brand to be protected for use on goods or with services, contact an experienced attorney who can guide you through the process. We have more than twenty years of experience in trademark law, including licensing. Please reach out if you have questions about the use or protection of your mark.