My new company paid $500 to a designer in Bulgaria for a company logo. The invoice we received says that we have “the right to use the logo in any way, forever.” We good?
A Bit Worried
A recent case filed in both federal and state courts in Georgia should have you more than a bit worried. This case shows just how copyright and trademark law sometimes collide, with messy results all around.
Back in 1996, some guys started a small brewery called “Sweetwater Brewing”. A friend of the founders, Ray Scott Fuss, drew them a logo featuring a brightly colored trout. (Don’t get the Doc started on beer that smells fishy!)
Fuss billed the company $500, which it paid. The company incorporated the logo into its cans, signage, and lots of other swag such as T-shirts, hats, glassware, and so on. All was well in the beer garden. Well, that is, until 2020, when the company was sold to Aphria for $300 million (which then merged with Tilray to become the world’s largest cannabis company, with a value of over $8.2 billion, which even the Doc thinks is one hell of a lot of weed!)
At that point, Fuss started sending demands to the new owners for money, asserting that he owned the copyright in the logo. Fuss saw that in the merger paperwork, Sweetwater valued its intellectual property at $92 million, and he asserts that $31 million of that is the value of the logo he designed. Fuss sued in Georgia state court last September. Tilray has now sued Fuss in federal court for a declaration that it has the right to use the logo.
Under copyright law, Fuss, who was not an employee of Sweetwater, owns the copyright in his artwork unless there is a written and signed contract saying otherwise. Tilray, in its complaint, asks the court to find that it either owns the artwork, or that it has an “irrevocable implied license” to use it. The company notes that it holds registered trademarks that incorporate the trout. (The Doc fails to see why this matters at all!)
All of this fishy business could have been avoided by having a simple written contract, signed by the parties at the outset, but, like most startup businesses, Sweetwater thought that it was more important to save a few nickels and not involve an experienced intellectual property attorney. As the old commercial for Mobil gas used to say, “Pay me now, or pay me later.”
Have questions about your ownership or right to use some copyrightable material? It’s best to call the attorneys at LW&H. They do this stuff the right way, and in the end, you’ll save money, time and lots of worry.
Until next month,
— Lawrence A. Husick, Esq.