By Brian D. Kaider
In the July/August Issue, The Grapevine published an article by attorney, Lindsey Zahn, entitled “Wine Labels 101: Navigating TTB’s COLA Process.” The article described the information that must be contained on the label as well as how the label gets approved for use.
This article will discuss how to protect the design of the label. Aside from the required information relating to contents, origin, etc., a label contains many creative aspects, including: brand names, logos, pictures, drawings, color schemes, unique label shapes, backgrounds, and fanciful descriptions of the winery and the product. But, in a crowded market, how can those elements be protected against copying by competitors? There are three tools available to wineries to protect their labels: trademarks, trade dress, and copyrights.
Much has already been written about trademark and trade dress protection. Essentially the winery name, the logo, and possibly the name of the wine (if it is a fanciful name rather than simply the name of the varietal), may all be registered as trademarks. Trade dress refers to the overall appearance of the product packaging, such as the size, shape, color, layout, and text of the label. As with trademarks, trade dress protection is designed to prevent consumer confusion as to the source of goods.
Far less has been written about copyright, however. In fact, few wineries have even attempted to register their labels for copyright protection; for good reason, it would seem.
What is a Copyright?
Copyright protects works of original artistic expression, such as books, paintings, sculptures, musical compositions, song lyrics, photographs, movies, and architectural structures. Unlike patents, which must be granted by the federal government to be enforceable, or trademarks, which must at least be used in commerce before rights attach, an author has copyright protection the moment an artistic work becomes “fixed in a tangible medium,” (e.g., when a photograph is taken, a painting is completed, or a composer transfers the notes in her head to the staff on a paper).
This protection obviously gives the author the right to prevent others from making copies of her work, but it also allows her to prevent others from performing, displaying, and distributing the work, or from making “derivative works” from her original. It is important to note that copyright only protects the artistic expression, not the underlying idea. So, for example, the theme that “the human conscience cannot bear the burden of guilt” is an abstract idea and not protectable by copyright. But, Poe’s The Tell Tale Heart is an expression of that concept and is protectable.
While copyright protection exists at the moment of creation, there are two steps that should be taken in order to enforce those rights. First, notice should be given of the claim to copyright protection. This can be accomplished simply by placing on the article: the copyright symbol, the year of first publication, and the name of the author or owner of the copyright (e.g., “© 2017, Hypothetical Winery LLC”). While this step is not required, failure to mark a work with such notice can complicate enforcement efforts, because the author will either have to prove that the person copying her work had actual notice of her prior work or the damages available to the author will be limited. Second, in order to sue an infringer, the copyright must be registered with the federal government. If the author waits until after an infringement occurs to register the work with the Copyright Office, her remedies will be limited to an injunction preventing further copying and her actual damages, which may be quite limited and difficult to prove. If the work is registered before the infringement, however, then the author may also be entitled to considerable statutory damages and her attorney fees incurred in the enforcement effort.
Are Wine Labels Eligible for Copyright Protection?
Given how much time and money is spent on branding agencies to develop aesthetically pleasing wine labels, one might think that every winery should rush out and file for copyright registration of all their labels. It turns out that whether a wine label is eligible for copyright protection is surprisingly complex and, in fact, courts have held that labels in general require a higher degree of originality than other creative works. This is because most of what a label contains is factual information, such as identification of contents, and expression dictated by utility, such as “refrigerate after opening.” Purely factual or utilitarian expression is not protectable, because it does not benefit society by adding to the body of artistic work and there are only so many ways to say “best if used by 12/4/2017.”
So, how much creativity is required for copyright eligibility? According to the U.S. Supreme Court, in its 1991 landmark Feist Publications, Inc. v. Rural Telephone Service Co., Inc. decision, the originality requirement is “not particularly stringent,” and other courts have found certain labels, such as the one on Pledge furniture polish, to be protectable. Where exactly that line is drawn, however, is subject to interpretation by the Copyright Office and the courts.
The following is an example of a label that would probably be refused copyright protection. Note the plain background, the use of standard fonts, and the symmetrical display of information. There is also no descriptive text, merely the information required of any wine label. While Mark Ryan Winery has secured a federal trademark for the “Dead Horse®” name, this label probably would not qualify for copyright registration.
This label from Darioush Khaledi Winery, LLC (and one of this author’s absolute favorite wines) is a closer call, but probably still not protectable as a whole. Note the distinctive font used in the Darioush name as well as the gold-colored image of the Persian King, Darius, holding an amphora. Both these elements are subject to valid trademark registrations. Though difficult to see in this image the hand-written word “Darioush” in raised lettering also appears across the label. These elements add a creative element to the label in both their appearance and arrangement, but may not elevate the entire label to the level of creativity required for copyright protection. As discussed below, however, they may independently be registerable.
This label from 3 Blind Moose Cellars, goes a few steps further. Note the non-standard font, the colors that match the background and highlights of the picture, the asymmetrical and unusual layout of the textual elements, and, of course, the illustration of three very cool, wine-drinking moose. Although the text is fairly sparse on this front label, it is one for which a reasonable argument could be made for copyright registration.
Worth noting, too, is the back label of this wine. Many wines provide a description of the wine, vineyard, history, or wine-making processes on their back labels. These descriptions are nearly always eligible for copyright protection. In this case, there is no doubt that the tongue-in-cheek descriptions and suggested food pairings (“hold the moose pie!”) are original works of authorship, worthy of registration.
Finally, this label from Stags Leap presents probably the strongest argument for copyright eligibility of a front label. Aside from the mandatory informational text, the label contains raised lettering representing creative prose. This should be sufficient to render the entire label protectable, but still it is possible that the Copyright Office would limit the protected portion to only the words themselves (assuming that this text is an original work of authorship and not copied from another source).
Who Owns the Copyright?
In the labels shown above, even if the entire labels are not eligible for copyright protection, some of their elements may. The picture of King Darius, the prose on the Stags Leap bottle, and, of course, those cool moose, are all original works of artistic expression eligible for copyright registration. Who may file for that registration, however, is not so simple. While it would be tempting to assume that the owner of the winery also owns those trademarks, that may not always be the case. Copyright protection is afforded to the artist who creates the work. If the winery owner herself created the work, then there is no issue. If the work is created by an employee of the winery, who is acting within the scope of that employment when creating the work, then it is a “work made for hire” and the employer is considered the author.
Most often, however, the winery will engage the services of a branding agency or an independent artist to create the artwork for its labels and/or the entire labels. In that case, it is the agency or artist who owns the copyright to the work. What this means from a practical standpoint is that the winery is very limited in what it may do with the artwork and the artist may be able to use the art for other purposes.
For example, if 3 Blind Moose Cellars commissioned an artist to create the picture for its label, the winery would be able to use the picture for its labels, but it could not put that picture on t-shirts to sell in its tasting room without permission from the artist. The artist, meanwhile, could sell that picture to companies making greeting cards, posters, mugs, or even other wineries.
So, when engaging the services of an agency or artist to create this type of work, it is essential that a written agreement clearly define the rights of both parties. In the ideal situation for the winery, the parties would agree that the artist assign ownership in the copyright to the winery. Absent an outright assignment, the next best option is an exclusive license. However, the scope of an exclusive license can vary significantly, because the bundle of rights associated with copyright is infinitely divisible.
For example, the winery might get an exclusive license to use the artistic work for wine labels, meaning the author could not allow any other winery to put the picture on a wine label, but they could license others to use it for t-shirts. The license could also be restricted geographically, so that the winery only had exclusive rights to use the work in the State of Texas or east of the Mississippi River. The license could be restricted in time such that the winery only had exclusive use of the picture for 10 years. Different aspects of the rights may be licensed separately, as well. So, the winery owner could have exclusive rights to make and distribute copies, but not the right to make derivative works.
The weakest protection would be a non-exclusive license. Not only would this mean that the artist could license its work to anyone else, including another winery, but a non-exclusive licensee has no standing to register the copyright in the work and no ability to sue others who infringe that copyright. The winery would have to rely on the artist to sue someone who used the copyrighted work without permission.
Considering the time, effort, and money put into branding and creating a commercially appealing label, wineries would be well-advised to seek the advice of a knowledgeable intellectual property attorney to develop a strategy for protecting that investment. Ideally, the attorney should be involved in the process of contracting with a branding agency or artist and conceptualizing the label elements.
Brian Kaider is a principal of KaiderLaw, an intellectual property law firm with extensive experience in the craft beverage industry. He has represented clients from the smallest of start-up breweries to Fortune 500 corporations in the navigation of regulatory requirements, drafting and negotiating contracts, prosecuting trademark and patent applications, and complex commercial litigation. bkaider@kaiderlaw.com, (240) 308-8032
