Disney's Trademarks

Today, Disney Enterprises Inc. is one of the most expensive and successful companies in the world operating in 172 countries (Lazarus, 2015). It possesses 11 amusement parks, water parks and several television networks. The company owns several studios engaged in the distribution of cartoons and movies for children, and produces a huge range of consumer products as well. Disney Enterprises Inc. is one of the world's largest companies, which successfully create cartoon characters and legends about them, register trademarks, and subsequently sell the licenses for the production of goods and services under their brands. Therefore, it is noteworthy to study the trademarks, which belong to Disney Company, along with their history and legal support, in order to determine the legal way of using them.

The Logo and Trademark for Disney

Just like most other movie emblems, the Disney logo is mixed. It combines the graphics and sound. The presence of two components, visual and acoustic, makes the brand more alive and associative. The first video-logo was created in 1985, after the death of Walt Disney (Lazarus, 2015). The first video-logo features the silhouette of the Sleeping Beauty's castle, the prototype of which was the German Neuschwanstein Castle. Under the castle there was one of (because each autograph of the artist was unique) Walt Disney's personal signatures. Only the spelling of the capital letters "W" and "D" remained without change. For ten years, the logo had not been changed, and only in 1995, with the release of the cartoon "Toy Story," the film company decided to experiment with the logo (Lazarus, 2015). In 2006, the logo underwent cardinal restyling. Its basis changed and became more animated, and the Sleeping Beauty's castle was replaced by the more voluminous and large-scale house of Cinderella. In 2011, Walt Disney Pictures refused to use the long signature in favor of a short “Disney” (Lazarus, 2015). Currently, it is registered as “Image Trademark with Serial Number 77154442”, which has been covering the production and distribution of motion picture films and television programs since 2011 (Justia, 2017a).

History of Disney Trademark

Nowadays, there are many registered trademarks under the name of “Disney” that cover the production of goods and services, which greatly differ in their look and purpose. On May 21, 1928, Walt Disney filed an application for the registration of his first trademark Mickey Mouse, which was registered on September 18, 1928 (Justia, 2008). He justified his choice of the mouse as the protagonist by the fact that the "Laugh-O-Gram" studio in Kansas City, where he worked in the early twenties, was literally awash with these rodents, similar to the cartoons of those times, and he decided to try to tame one of them (Watts, 2013). Products with a cartoon hero Mickey Mouse, including the albums for drawing, first appeared in 1929. Now, the Disney Consumer Products division produces printed products, including a huge range of toys, products, household products, electronic and computer games and children's cosmetics under the Disney brand. Today, Disney Enterprises Inc. is the holder of more than 6,000 trademarks, which restrict the production of various children's products for home and office, food, electronic devices, etc., with the images of the Disney characters having no license (Lindblad, n.d.).

Protection of Disney’s Trademarks

Trademarks owned by Disney Enterprises Inc., are protected by the US Trademark Law, which aims to prevent the sale of goods of one manufacturer by another one as his own. It was adopted in 1881, 1905 and clarified in 1946 (Leaffer, 2014). A trademark violation occurs when a person, without the consent of the trademark owner, uses for commercial purposes any reproductions, counterfeiting or copies of a registered mark in relation to the sale of goods, if such use may lead to confusion, error or deception. In case of the trademark violation, the owner of the trademark can receive a restraining order from the court against further violations, recovering the profit received by the offender, and receiving compensation for damage because of the violation as well. In this regard, the court is entitled to triple amount of the compensation. According to the decision of the court, trademark-infringing goods can be destroyed.

Criminal penalties for the violation of the trademark are applied only to those individuals who deliberately trade goods and services using a forged brand. Types of punishment can reach up to 10 years of imprisonment and a fine of $2,000,000, although the expected penalties are considerably less than this (Leaffer, 2014).

Trademark License for Disney

Today, Disney is one of the largest licensors in the children's goods segment. Disney is engaged in the creation and promotion of the movie production, as well as the sale of licenses for the use of images of the Disney characters. At the same time, the license agreement provides the participation of the Disney Company in all production and marketing issues, for instance, product design development, retail positioning, and promotional support (Drummond, 2017).

The licensing business model has many similarities with franchising (Internicola, 2012). In terms of the business structure, they are similar, because franchising is some kind of an intellectual solution as well, or even a ready solution for all business processes, while license protects the intellectual property and gives an idea on the proceedings. When buying a franchise, the buyer acquires not only the brand itself, but also instructions on how to work with it (Internicola, 2012). The license makes it possible to create the emotional attachment to the quality products. Disney Company creates beautiful stories, and designers of clothes, shoes, and accessories adapt the heroes of these stories to their products, so it becomes more and more popular in the market. Disney heroes live on the screens, being easily recognizable and beloved.

Therefore, the license does not imply any business restrictions, so it can be easily adapted to many products. The trademark holder precisely controls the adaptation. For example, in case of Disney TM, before starting to work, each licensee receives a so-called "style guide" (Drummond, 2017). It is a brochure, which consists of many files with images of the selected characters, color backgrounds, pontoons, and style solutions. In fact, the designer can use this "style guide" to combine its individual elements, and get a unique product. Each licensee has the product development manager, who is the worker of the Disney Company. He actively participates in the creation of the concept of the product, and tries to ensure that it meets the requirements of Disney. The licensee brings his/her experience to the production process, including market knowledge and professionalism (Drummond, 2017). This is the main principle of fruitful joint collaboration of the company with the licensees. It is also noteworthy that the Disney Company cooperates with both leaders in their segment and young, developing companies, working in various price segments as well.

Challenges and Fighting of Disney for Trademarks

Disney Enterprise Inc. protects its trademarks by legal means, filing lawsuits against violators. Thus, one of the numerous lawsuits concerning the trademark infringement was the lawsuit of Disney Enterprises Inc. against Phase 4 Films that was filed in 2013 in the California court. In that case, the company required destroying all DVDs with the movie “Frozen Land” by Phase 4 Films, which contained logos and images of the brand and infringed the trademark “Frozen” (Gardner, 2013).

However, since trademarks and copyrights are directly related, in 1998, the company had to protect its exclusive rights to the Mickey Mouse trademark (Lee, 2013). The Disney Enterprises Inc. has had the rights to Mickey Mouse since 1928. For the company Mickey is one of the main assets. The analysts estimated the value of Mickey Mouse to be more than $3 billion (Lee, 2013). In 2000, Walt Disney's monopoly on Mickey Mouse was due to end, and therefore, the company started to lobby the law concerning the increase of the copyright protection terms. Initially, the lobbyists demanded an eternal monopoly. However, the endless copyright terms contravened the American Constitution. The Accepted Copyright Term Extension Act, accepted in 1998, extended the terms of copyright protection to validity throughout the life of the author and 70 years after his death (Lee, 2013).

Legal Usage of Disney’s Marks or Character

In order to use legitimately the images of cartoon characters in commercial business activities, business owners need to sign a license agreement with the right holder (Lindblad, n.d.). Products licensed by Disney Enterprises Inc. have to comply with the price category and the audience for which they have been designed. The company considers it impractical to sell the license, if the product will never meet any of these criteria. In addition, the price has to correspond to the distribution channel, through which the goods will be sold. Therefore, firstly, the manufacturer offers his/her business idea to the company. Next, together with the managers of the Disney Company, he/she develops a business plan, which will include data on prospective sales and distribution volumes (Drummond, 2017). In addition, the company's partners have to be prepared for a certain marketing activity. Further, managers and analysts of the company assess the market situation and the created proposal and determine the percentage of payments from the sales of the proposed goods. Only after signing a licensing agreement, the manufacturer has the right to start producing and selling the products, which use the trademarks owned by Disney Enterprises, Inc (Drummond, 2017). In other cases, he will be considered the infringer and will have to deal with the company’s lawsuits.

Other Facts Concerning Intellectual Property and Trademarks of Disney

The first character painted by Walt Disney was the rabbit Oswald. Perhaps, if the distributor did not bravely steal the right to character from the multiplier, the lucky rabbit would have brought the success to the company 2 years earlier, than it happened in reality (n.a., 2016). His companion, who was not eager to share his fees, inflicted that blow in the back of Walt Disney. Their contract was developed in a way to make the distributor, and not the author, an owner of the rights to the cartoon character. That was a bitter, but useful lesson for Walt Disney, who since that time had been carefully monitoring the fact that all rights to all of his creations belonged only to him (Watts, 2013). It is noteworthy that the trademark “Oswald the lucky rabbit” still exists today and belongs to the Disney Enterprises Inc. It was registered in 2016, and specializes in the production of clothing, namely, shirts, tops and headwear (Justia, 2017b).

Conclusion

The Disney video-logo includes the sound and image with the silhouette of the castle, which is registered now as “Image Trademark with Serial Number 77154442” and has been covering the production and distribution of motion picture films and television programs since 2011. Today, Disney Enterprises Inc. is the owner of more than 6,000 trademarks. The first trademark “Mickey Mouse”, which belongs to the Disney Company, was registered in 1928 and is still legitimate. It creates the characters and their legends, and registers the trademarks, which allow people to use these characters while manufacturing some goods, along with selling the licenses for the usage of the images. However, the company is extremely selective in choosing the licensees and controls both the production and sales of goods with its brand, receiving a percentage of income generated from the produced goods or services. The rights of Disney Enterprises Inc. in the cases of the unauthorized sales of goods with its brand are protected by the US Trademark Law, which was decisive in various lawsuits, for instance, the lawsuit of Disney Enterprises Inc. against Phase 4 Films in 2013, when the trademark “Frozen” was infringed. The issues of copyright protection and the unlawful creation of trademarks affected Walter Disney at the beginning of his multiplier career, when he created the character of Oswald, but he could not prove that. However, despite this fact, “Oswald the lucky rabbit” returned to the company after the death of Disney in the form of a trademark registered in 2016.