by Rosanne Yang

This week, heading into the season of Super Bowl commercials, the newsfeeds here at InfoLawGroup are filled with news of Sam Adams’ riff on the Budweiser Clydesdales, which Anheuser-Busch has made various efforts to protect over the years. Media outlets tagged it as ‘stealing,’ ‘spoofing,’ ‘parodying,’ ‘swiping,’ and ‘borrowing.’ There seems to be wide agreement that the take is hilarious. But does hilarious make it legal? Not necessarily.

It turns out that when and how competitors can use each other’s intellectual property is an enormously complicated subject, fraught with legal peril. So much of the result in each of these use cases will be driven by context-specific factors that taking a run at any of them without close consultation with an intellectual property attorney would be dangerous.

Let’s break it down.

Parody – Most people equate parody with “funny.” However, the legal definition of parody under copyright law requires more: it requires that the new work comment upon or criticize the original. Some US courts have brought parody into the trademark context, with one court defining it as a “simple form of entertainment conveyed by juxtaposing an irreverent representation of a trademark with the idealized image created by the mark’s owner.” Even if recognized as a parody in the trademark world, likelihood of confusion and/or dilution factors are still applied to assess whether the parody is legal. Some companies have found success here. For example, after a lot of legal expense, the makers of CHEWY VUITON branded dog toys, were – for reasons largely driven by the concept of parody – declared victors after they were sued for infringement and dilution of the famed LOUIS VUITTON trademarks.

Satire – Like parody, satire is funny. Unlike (the copyright definition of) parody, it comments on society, people, or issues rather than the original work. Satire is not a defense to infringement under copyright law, but given the definition of trademark parody by some courts, satire could potentially be a defense to trademark infringement, subject to the same application of likelihood of confusion and/or dilution factors.

Compatibility – Companies do have a limited right to identify that their parts are compatible with another company’s parts. As a threshold matter, that claim must actually be both literally true and not misleading. Beyond that, it can get tricky as you look at the particular applications. The general idea is that you cannot use more of another’s mark than is reasonably necessary to convey the factual material, and you cannot suggest that your product comes from or is endorsed by other company. Factors like particular word choice, word placement, and word size become deciding factors in whether your compatibility claim falls on the side of legal “fair use” or infringement and maybe even false advertising.

Comparisons – Competitors also have the limited right under federal law to identify each other in making comparisons between their products or services – often on prices or features such as taste or how long the product will last. But there are caveats. First, the comparison must be supported by not just fact, but documented fact, which is also known as substantiation. Second, the comparison must be truthful, and even if technically true, must not deceive consumers because of an implied message. Here again, minor changes to wording or context can make substantial differences in whether your comparison is a lawful one.

Borrowing – Sometimes you can even straight out borrow from your competitors for none of the above reasons. Just last week, a federal appeals court on the west coast held that even though the phrase LETTUCE TURNIP THE BEET was a registered trademark in connection with clothing, another company could still dish up that phrase decoratively on the front of clothing products that it was selling. The decision came down to whether or not consumers recognized LETTUCE TURNIP THE BEET as an identifier of the source of the goods, or whether it was merely aesthetically pleasing – a factor that was out of the alleged infringer’s hands. Keep in mind that this is a pretty rare result, and many cases have turned out differently…including a decision in 2014 where the court refused to toss trademark infringement claims brought by the owner of LETTUCE TURNIP THE BEET against Gymboree (that case appears to have settled after the ruling).

Given the number of potential landmines associated with these topics and the hairline changes that can make big differences in legal result, when deciding whether or not to use another company’s intellectual property, start by asking yourself:

1. Do I really need to use it?

2. Have I reduced as much as possible the amount of it I use, while still achieving my objective?

3. Are there good facts that support my use?

4. Will it be worth the hundreds of thousands of dollars (or more) that it may take to defend my use, even if I end up winning?

If you answered “no” to any of those questions, then you probably want to reconsider. If you answered “yes” to all those questions, your next stop is your intellectual property attorney, who will help you assess the risk level for your particular situation and advise you on ways to mitigate any risks.

Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE.