Netflix lawsuit trademark law

What Business Owners Can Learn About Trademarks from Netflix’s Lawsuit

by | February 11, 2019

If you’re a fan of science-fiction dramas, you’ve likely seen the Netflix original series Black Mirror. The series is composed of stand-alone episodes that explore what Rotten Tomatoes refers to as ‘our collective unease with the modern world… exploring themes of modern techno-paranoia.’ However, the latest season has spurred an unintended kind of drama —a trademark infringement lawsuit. Let’s take a look at what business owners can learn from Netflix’s off-screen drama and the responsibilities and risks associated with trademark law.

What is a trademark?

Before we get into the events that triggered the lawsuit against Netflix, let’s breakdown the basics of trademark infringement. A trademark is a word, phrase, symbol, logo, or even a sound or smell that connects the consumer to the source of a product or a service. Trademarks are often referred to as “brands”. The Nike swoosh and the slogan ‘Just Do It’ are both trademarks of the company. Not to be confused with patents or copyrights, trademarks arise from the use of the mark in commerce. Most businesses have trademarks whether they realize it or not, and some business’s trademarks are core to their marketing and brand recognition efforts and should take action to register their marks.

Common law trademark rights arise immediately upon a company’s use of the mark in commerce but the rights are limited to the geography and industry where a business operates.  If the marks are used in interstate commerce, they qualify for federal protection and can be registered with the US Patent and Trademark Office (USPTO). For instance, Nike is in the business of sporting goods and does business in interstate commerce. If another company used the swoosh or slogan in connection with sporting goods or services, they would be infringing upon Nike’s trademark rights. However, if a company used the word ‘Nike’ or the swoosh independently in connection with auto parts, their use may not be an infringing use because the customer would realize that Nike is not in the auto parts business. Nike is not a perfect example because ‘famous’ marks have greater protection. In fact, a customer might be more confused in this example wondering why Nike has moved into the auto parts space. For the average business, however, their trademark rights are limited to the industry where they do business. Note that there’s Starbucks coffee and Starbucks towing that co-exist because the co-existence does not result in customer confusion.

Did Netflix infringe on Chooseco’s trademark?

The most recent episode of Black Mirror, “Bandersnatch” was produced in an innovative media format — Netflix viewers can make decisions for the main character leading to various versions of the story. The storyline for the episode follows the main character as he works to program a fictional book into a video game, also with various user-driven plot lines. So both the Netflix viewer and the character in the show are living a “choose your own adventure” style experience, which is exactly how the main character in the show describes it.

When describing the book turned video game, the main character says, “It’s a “Choose Your Own Adventure” book. You decide what your character does. They’re like a game.” NPR reports that this is the moment in the show that prompted Chooseco, producer of the Choose Your Own Adventure book series, to file for trademark infringement.

Chooseco, which is not affiliated with Netflix, is claiming the use of the phrase “Choose Your Own Adventure” in the episode will cause confusion for viewers by suggesting the “Bandersnatch” episode is associated with Chooseco’s book series, and that the dark content in the “Bandersnatch” episode is harmful to the family-friendly image of the original Choose Your Own Adventure series.

Business Owners are Responsible for Policing Trademark Rights

It’s important to understand that in the case of the suit against Netflix, neither the U.S. Patent and Trademark Office’s or any other federal organization were the ones to raise the red flag about the potential trademark infringement. Essentially, there is no regulatory agency that polices trademark use – that responsibility falls completely to the trademark holder. The trademark holder must police the use of their marks and take action if they find uses of their marks that are potentially infringing. If you hold the rights to a trademark through common law or federal registration and have concerns about a potential infringement, work with your business attorney or trademark attorney to address next steps.

The Choose Your Own Adventure books were extremely popular in the 1980s and 90s, but since then, it’s not uncommon to hear “Choose your own adventure” used in everyday language to describe other scenarios or products. Trademarks are the customer’s association of the mark to a particular service or product. If a business’s trademark becomes so commonly used in everyday language, typically from popularity, it runs the risk of genericide — making the trademark worthless. For example, the term ‘Escalator’ was originally trademarked to the Otis Elevator Company but was eventually deemed generic. In the case of Chooseco, their trademark has become a common phrase for any storyline that allows the user to choose the ending. Netflix will argue and the court may agree that “Choose Your Own Adventure” is a generic phrase and no longer protected by a trademark.

How to Protect your Trademark

Beyond being interesting and news-worthy, this case actually teaches us a lot about the steps business owners need to take to protect their trademarks. If you’ve put the work into creating a strong trademark or service mark that customers associate with your products and services, you should take these initial steps:

  1. Make sure you’re not infringing upon someone else’s trademark. Hopefully, when you first developed your trademark or service mark, you took the time to ensure your right to use it. If not, you should perform a thorough Internet search and a search of registered trademarks on the (USPTO) site.
  2. Register your trademark. If you are doing business in interstate commerce, you should register your mark(s) with the USPTO. Registration gives you enhanced legal rights and leverage to enforce your rights in the event of a trademark dispute. Registration makes you the legal owner of the rights to that trademark in connection with your goods and services, and it’s then listed in the federal database, so if someone performs a search they can see yours is already registered.
  3. Use your trademark symbol. One of the best ways to proactively protect your trademark is to display the appropriate trademark symbol whenever you use the mark such as on your products, marketing materials and website.
  4. Monitor the use of your mark in commerce. It’s your job to police the use of your mark. Set up alerts so that you are notified when your mark is found by search engines and be proactive in notifying infringers of your rights. If you fail to take action, you risk the mark becoming generic.

As a business owner, it’s important to recognize that your marks are valuable assets of the company that distinguish it from others in the marketplace. You can build a strong and valuable brand by ensuring the marks you’re using do not infringe others’ rights, that your rights are protected by registration and notices, and enforced with consistent policing to take quick action against any potential infringement. These steps are paramount to maintaining your trademark rights.