Twenty five years after his death, Andy Warhol’s legacy, The Andy Warhol Foundation for the Visual Arts (“Foundation”), is being sued by the iconic band The Velvet Underground partnership (“VU”) for trademark infringement. http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2012cv00201/390369/1/. The case is The Velvet Underground v. The Andy Warhol Foundation for the Visual Arts, 12-0201, U.S. District Court, Southern District of New York (Manhattan), filed on January 11, 2012. Specifically, VU’s four claims include: (1.) there are no copyrights in the banana design and is requesting such declaratory judgment, (2.) false designation of origin of the banana by the Foundation, (3.) unfair competition by the Foundation under New York common law, and (4.) misappropriation of the alleged trademark by the Foundation. The Foundation is due to respond to VU’s complaint in federal court on or before March 5, 2012.
During the heyday New York in the late sixties, Warhol managed the Velvet Underground. They had what appears to be a symbiotic relationship where the band performed at his studio, The Factory, and participated in his traveling multimedia show called The Exploding Plastic Inevitable. http://www.nyc-architecture.com/MID/MID025.htm and http://www.pbs.org/wnet/americanmasters/episodes/andy-warhol/a-documentary-film/44/
In 1967, and following an artistic collaboration between VU and Warhol, the band released its first commercial album, “The Velvet Underground and Nico.” On its cover was a banana, designed, selected and signed by Warhol.
The banana image is well-known and some find the work to be one of the best album covers of all time.
The band, which existed form approximately 1965 to 1973, filed the lawsuit last month to prevent the Foundation from licensing the “banana image” to third parties for such things as use on covers for iPads and iPhones. The band has claimed that the banana album design – with “Peel slowly and see” printed near the tip –is synonymous with their work. They have also asserted the banana design is a major element of VU’s ongoing licensed merchandising activity and the use of the design as a trademark has been exclusive, continuous and uninterrupted for greater than 25 years.
As part of the trademark infringement claims, VU (originally founded in January 1965 by Lou Reed, John Cale, Sterling Morrison, and Angus MacLise and originally called “the Warlocks” or “The Falling Spikes” until November of 1965 when the name was changed to the “Velvet Underground”- all noted in the complaint) has alleged that the design became a symbol and an icon of the band, and that the public, especially those who listen to rock music, instantly recognize the banana design as the symbol representing VU. The band claims that licensing the design to third parties will cause confusion or mistake as to the association of VU with the goods sold in commerce by those third parties.
The banana design was never officially copyrighted by Warhol or the band. The band has asserted that the design cannot be copyrighted now because it is in the public domain and that the illustration came from an advertisement that was in the public domain. VU is seeking to prevent the use of the banana by third parties, a judicial finding that the Foundation has no copyright interest in the design, unspecified damages, and a share of the profits made by the Foundation from any licensing contracts it has.
The Foundation’s mission is grant-making to support the creation, presentation and documentation of contemporary visual art, particularly work that is experimental, under-recognized, or challenging in nature. http://www.warholfoundation.org/foundation/index.html.
In 1987 the Foundation took ownership of the copyrights and trademarks in Warhol’s possession at his death. The Foundation has already had license agreements with Levi’s, Burton snowboards and apparel, Philip Treacy hats, Rosenthal china and glassware, S.T. Dupont pens and lighters, Adidas footwear, Robert Lee Morris Jewelry, Seiko watches, and Campbell’s Soup.
So… Who Wins? – The band or the artist’s Foundation?
The Copyright Issue
Who owns the copyright to Warhol’s banana artwork? Is VU correct in saying that the Foundation does not own the copyright because the design was in the public domain and is not copyrightable?
Under U.S. Copyright law in effect at the time the VU album was published with the Warhol Banana, (before December 31st, 1977) a copyright holder was required to submit his intent to preserve his copyright ownership rights in his artwork with the US Copyright Office, submit a copy of the copyrightable work with the copyright office and put a copyright notice on copies of the work to be protected. VU as plaintiff in their lawsuit asserts that those formalities were not properly complied with and claim that the banana artwork is in the public domain. When a piece of artwork is in the public domain, the copyright belongs to no one person and therefore anyone can use, reproduce, distribute and make derivative copies at will, without the need to get permission or pay a license fee to the copyright owner.
The defendant in this case, the Foundation, will likely argue that Warhol obtained common-law copyright ownership in the banana artwork at the moment he fixed the artwork in a tangible medium. In other words, once Warhol created the banana painting, he had a common law copyright in his painting. Under U.S. Copyright Law, a copyright is conferred upon the author of an original work of art that is fixed in a tangible medium.
The Foundation may further argue that by allowing the VU to use the banana painting on their album cover, Warhol merely gave a license to VU to use the art. Under U.S. copyright law, the copyright owner retains the copyright of an original work even though he has sold, licensed or gifted the work to another. For example, even though a painting is bought and sold over and over, and legal title changes from one owner to another owner, the original copyright remains with the original author. The most common way copyright ownership is transferred from the original author to another during the author’s lifetime is where the original author grants an assignment of copyright, which is expressly given in a written instrument signed by the author. According to the facts listed in VU’s complaint, based on the facts presented in the complaint, there is no evidence Warhol assigned or transferred his copyright in the banana artwork to VU or anyone else.
Copyright could have passed from Warhol to VU if the banana artwork was created by Warhol specifically for VU as a ‘work-for-hire.’ Because the facts in the complaint do not indicate a work-for-hire agreement ever existed at the time the artwork was created, there is no reason to believe anyone other than Warhol himself owned the copyright to the banana design.
The Foundation could argue that because Warhol signed the banana design, that he intended to claim common-law copyright protection. Of note is that Warhol acted as the manager for VU and had his own commercial interest in the success of the band. What if Warhol was considered a partner of the band, having shared in its profits? This argument could be construed from paragraph 8 of the complaint that states that Warhol shared in the cash advance given to the band for the production of the album. In the complaint, VU asserts that Warhol directed a light show called “The Exploding Plastic Inevitable” where the members of VU provided the music and Warhol announced, in February of 1966 for WNET, that he was sponsoring the band. Under principal-agency principles, an interesting partnership argument could develop that Warhol was the principal partner in the VU partnership and therefore was a co-owner in everything VU created. This argument would essentially mean that Warhol held partnership interests at his death and that he apparently transferred them to his Foundation as he did most everything else. If that happened, then the Foundation and VU are in a partnership today. Warhol gave the band the right to use the banana because he had a vested interest in the band’s success and because he wanted to share in that success as an artist. Warhol may have indeed viewed himself as a partner in the ownership of the band. It is possible that the Foundation may have a counter-claim for lost profits and royalties related to the sale of the album Warhol helped to create.
The Trademark Issue
Then there is the trademark issue. The short of it is that VU is claiming that the banana artwork should be a recognized legal trademark of their band because it has acquired secondary meaning under law, that the banana artwork identifies the band. Trademarks are governed by both state and federal law. The main federal statute is the Lanham Act, enacted in 1946 and amended in 1996. http://www.law.cornell.edu/wex/Lanham_Act. It provides the broadest source of trademark protection however state common law actions are still available. Under the Lanham Act, a trademark is a word, symbol, or phrase, used to identify a certain manufacturer or seller’s products and distinguish them from other products of other manufacturers and sellers. 15 U.S.C. § 1127. http://www.law.cornell.edu/uscode/15/1127.shtml.
To get protection under the Lanham Act, the first step is to federally apply for a trademark registration with the United States Patent and Trademark Office (USPTO). A trademark examiner will determine whether a mark is available to the applicant by conducting a national search to ascertain whether anyone else is using the mark. Even then, a trademark owner cannot assert a universal right to a trademark. A U.S. trademark registration is generally limited to the United States and only for categories of goods or services that are actually being used by the trademark holder. Any claim of a trademark for a good or service in a category that is not actually being used is considered fraud on the USPTO. In this case, it is not clear what categories in which VU is claiming trademark ownership rights. It could be that those rights only include musical performances, recordings and the sale of CD’s and DVD’s. Any attempt to claim a blanket trademark ownership over all categories will likely not be fruitful and will be met by strong opposition.
Briefly, if a party owns the rights to a trademark and another party infringes on that trademark, a lawsuit for trademark infringement may be brought. The standard in court is “likelihood of confusion.” Essentially, the question is whether the use of a similar trademark connected with a good or service offered for sale constitutes infringement of the senior trademark if the junior mark is likely to cause consumer confusion as to the identity of the source of the goods or services.
Courts usually look at a several factors to determine if a “likelihood of confusion” exists. The factors include: (1) the strength of the trademark; (2) the proximity of the items; (3) the similarity of the trademarks; (4) evidence of actual confusion; (5) the similarity of marketing channels used; (6) the degree of caution exercised by the average purchaser; and (7) the defendant’s intent behind the trademark. Polaroid Corporation, Plaintiff-appellant, v. Polarad Electronics Corporation, Defendant-appellee, 287 F.2d 492, 2nd Cir. CA (1961) or http://law.justia.com/cases/federal/appellate-courts/F2/287/492/. This analysis would be applicable if we were debating between two competing marks, but that is not what is happening in this case.
VU is claiming that the artwork of the banana, even though it does not have a federal trademark registration with the USPTO, identifies the band itself. Trademark infringement is usually found where some other producer of goods or services is claiming the same trademark as their own. Because so, the Foundation will like not claim trademark ownership rights in the banana design. Rather, they may claim that the artwork should be attributed to Warhol as its creator, evidenced by the fact the artwork includes the Warhol’s name as a signature of the artist on the artwork itself. To claim that the artwork identifies anyone’s goods or services other than Warhol will be a difficult argument to make. Anyone looking at the album cover sees Warhol’s name next to the banana design. Just because VU was allowed to use the banana artwork by Warhol, even in the presence of an implied license for use, does not likely extended to include an implied license to become the trademark for VU.
Interestingly, in the complaint, VU notes that it has previously licensed the banana design to Absolut Vodka in 2001 for an Absolut Underground national marketing campaign, and that Absolut’s advertisement said the banana design was a trademark of VU. This fact does not automatically make the banana a trademark for VU. In fact, in December of 2009, the Foundation (which believes it holds all the copyrights to Warhol’s works) put VU on notice that VU was committing copyright infringement by licensing use of the banana design. VU disagrees with this notion.
Warhol is well known to have created artwork for album covers, and he was not known as a creator of trademarks. At the time Warhol was creating his art, musicians were not making the kind of money they could make today and their expectations were not necessarily to create a trademark to use across multiple platforms. Plus, albums of the past were vinyl with large cases where the artwork was an important part of the creative presentation of the album.
It may also be important to analyze Warhol’s intent as it would have existed in 1967 when the album was created instead of the brand-conscious business oriented artist we might see today. Brand promotion and protection today exits for cross marketing in many mediums. Warhol is known for his social commentary regarding commercialism. As far as anyone can tell, Warhol was not in the business of creating brands (ie… a trademark) for up-and-coming artists. Warhol enjoyed commercialism, but was not trying to be a creator of commercial trademarks. That very idea seems to be in conflict with his art.
VU argues that the banana design has obtained a secondary meaning over a long period of time which in turn now identifies the band. One way for VU to prove the banana artwork has obtained a secondary meaning would be to conduct a survey of typical consumers. This survey would need to ask consumers whether or not they associate and identify VU by the image of the Warhol banana. This would likely prove to be a difficult task because the album was released in 1967 and the band split up around 1973. Today, the band exists as part of rock history, including fans of Lou Reed and VU, and those who have generally followed that rock genre. This is most likely a relatively small group of consumers, unless VU can find some well-educated fans. The Foundation on the other hand can submit their own surveys to demonstrate no connection between the Warhol banana and VU. This task may be easier for the Foundation as 40 years have passed since the band broke up.
In Summary, The Velvet Underground is using trademark law as what may been seen as a run around copyright law.
It will likely be difficult for VU to assert trademark rights in the banana artwork even if any association between the banana design and VU has been made by fans because the association is alleged to have been made only after the band ceased to exist. There is a difference between associating artwork with a band and actually creating a mark that identifies a band’s goods or services. An accidental association will likely be difficult to enforce. The Foundation may argue that even if there was a trademark right in the banana artwork when the album was created, the band ceased to exist in 1973 and that the band had abandoned the mark by not enforcing it as a trademark in every instance where it was used by others since 1973. In order to enforce its trademark rights in the banana artwork, the band needed to get a federal registration for the mark by the USPTO. That admittedly did not occur, so why the lawsuit now?
It appears that VU wants to use trademark law to gain the monetary value of the artwork for itself. VU would not normally be entitled to do so under copyright law or any other means. The federal claim filed by VU appears to be designed to wipe out any and all copyright claims for anyone, especially the Foundation. Then VU asserts a trademark claim so that VU is the only one standing who can financially benefit from the value of Warhol’s banana design.
Since the facts in the complaint do not allege that any agreements were formalized in 1967 between Warhol and VU, we are left to speculate. Warhol may have given the artwork to VU to use on its album cover as a license in return for the band’s work with him in his studio and as part of his light show. Who knows, but VU got the design for a song…literally, but in all likelihood, only an implied license to use and nothing more, so long as people care to buy and enjoy VU’s album. It is a stretch to imagine any likelihood of confusion in this case over the alleged banana trademark because the banana art bears Warhol’s signature and is manifestly attributed to Warhol whether it is viewed on an album cover, a poster, an iphone or in an art gallery.
The takeaway here is simply that all musicians and artists of all kinds should have their professional business dealings memorialized in an agreement. Copyright and Trademarks should be properly registered and protected. Problems may occur when friends have an understanding regarding a business arrangement that is based on a handshake early in their careers only to find out years later that the needs and professional aspirations of the parties have dramatically changed. An agreement with clearly stated terms will provide guidance to the parties involved as the years roll by and hopefully serve to avoid litigation. Having an attorney/counselor as part of your business from the beginning can go a long way to preserving and protecting your creative and professional endeavors.
Disclaimer: The discussion here is commentary by the author and does not constitute legal advice. This article is commenting about an actual controversy filed within the court system in New York by highly qualified and capable attorneys and will be defended by highly qualified and capable attorneys. This commentary is not intended to comment on the attorney’s ability or motive for participating in this law suit. As with all litigation, there is often inside information known only to the parties to the case beyond the facts found in the public complaint filed with the court that may have an affect on the analysis and outcome of this case. This commentary is intended to reach an audience that wants to know how and why these lawsuits happen, which can be for many reasons. Mr. DeGeorge is licensed to practice law in Florida and Colorada in the United States.
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