What do you do when you manage a crowdsourcing platform and want to get the press to talk about you? You operate in a niche business, crowdsourcing), and you know that it won’t be easy to get Forbes, Time and other influential outlets to cover your stories. What could you do to get noticed? One popular way is to take advantage of a news story, like the redesign of the logos Yahoo! and eBay, and to make your crowds create their own versions. What a fantastic way to communicate the core benefits of crowdsourcing.
But is this legal in the first place?
The specialists in this type of PR stunt are the Australian-born start-ups 99designs and DesignCrowd. The former launched contests to create alternative eBay logos after the “lame” redesign of 2012, to recreate a brand identity for the Washington Redskins or redesign the logo of the Miami Dolphins. DesignCrowd did for Sotchi 2014, for Manchester United, for Yahoo! or for 21st Century Fox! It’s always the same principle: “Designers, let’s help [brand] get a new logo that truly represents the company.” or “Let’s create a better logo for [brand] than what they have.” And, in terms of PR effectiveness, it seems to work.
“Shame on you for publishing something as an article that clearly belongs living in a banner ad” (Bob Schuster)
Fast Company, Fast CoExist, The Drum and The Next Web are some of the websites that pick up these stories to write articles that feature the respective crowdsourcing platforms. To be honest, it’s a great way to get PR coverage for almost free. Don’t get me wrong, I think it’s a witty idea to do that, as long as it also benefits the creatives whose creations are being featured. The purpose of this article is to address another question: the legal aspect.
99designs, DesignCrowd and the likes are using existing trademarks to derive commercial value – without the trademark holders’ consent. In other words, they use eBay’s, ManU’s or Yahoo!’s logo their permission. Is that legal? As often, the answer is: it depends. On what? On the country in which the brands are registered and protected. Why?
Because trademark and counterfeit law is not global, it’s specific to every country of this world.
According to the World Intellectual Property Organization (WIPO), trademark law grants companies an exclusive protection which covers signs, products and services which have been registered. A trademark is governed by a principle of territoriality. It provides protection for the state in which it was registered and each state has its own legislation setting out the conditions of validity and assessment of infringement. So global brands have to be registered and protected in every single country of the world!
There is no harmonization at the international level, and each state has its own rules. In general, and especially in France and Europe, the law applicable to such facts is that of the place where the damage was caused. Due to the global accessibility of the internet, the law considers that acts of infringement may be prosecuted if the disputed site explicitely targets the residents of that country (language, currency, delivery options…). Thus, if an Australian crowdsourcing platform infringes a registered trademark in France and that its site is not targetting the French public, the damage will not be suffered on the French territory, so the French law does not apply. An infringement action based on a breach of this brand’s rights will be rejected.
Acts of infringement may be prosecuted if the site explicitely targets the residents of the country of the brand holder
Conversely, if the Australian platform is oriented to the French public, that is to say that the French can open a user account and enter contests (note that should also take into account the rules of each competition may exclude certain states), the damage will be considered to be experienced in France, and the facts may give rise to the application of the French law. Of course, not knowing all legal systems everywhere, it is still possible that some legislations are tougher, and that the mere possibility to access a site on their territories allows the application of their law.
A general legal principle is also that a brand with a strong reputation has increased protection, at least under European law, as it also covers different products and services. So, even if eBay is not a crowdsourcing platform, thus competing with 99designs, the latter is not supposed to use the eBay brand without the consent of eBay Inc. Hence, using a famous brand as source of inspiration within contests, which are crowdsourcing platforms’ main commercial activity, shouldn’t be done. On a legal standpoint, the above platforms took a risk.
Using a famous brand as source of inspiration for contests shouldn’t be done
Another possibility is that brand holders may authorize third parties to “use” their brands for artistic purposes, which is the case for a brand like Coca-Cola or Heineken, which collaborate with world-famous creatives to redesign their bottles, for example. But the subsequent question is: Why should eBay, Yahoo! and consorts attack crowdsourcing platforms for organizing these contests? Would they consider that these initiatives harm their brands? Or does it benefit them by providing exposure and – after all – creative inspiration?
I think most of them don’t even care (“Manchester United declined to comment on the competition“). Which is why crowdsourcing platforms will probably continue to redesign famous brand logos. Until the first trial.