What Advertising Agencies Should Know When Creating Ad Campaigns

Hello!

When advertising agencies create advertising campaigns that include slogans, tag lines, and logos for a client, but the client subsequently does not use the campaign, who owns the trademark rights? The client or the advertising agency?

This is a hot issue in the world of advertising.  This issue was decided by the 2nd Circuit in the case, American Express Co. v. Goetz and Gardner Design Group LLC. 

Goetz and Gardner submitted an advertising proposal campaign to several credit card companies that included the slogan, "My Life. My Card."  Two months after submitting the proposal to AMEX, Goetz and Gardner registered the domain name, mylife-mycard, and filed a trademark application with the USPTO.

Subsequently, AMEX did not use Goetz and Gardner's proposal, but used another advertising agency's proposal that also included the slogan, "My Life. My Card."  AMEX immediately registered the domain name, mylifemycard, and filed a trademark application with the USPTO. 

When Goetz and Gardner discovered AMEX's use of the trademark, My Life My Card, they sent a cease and desist letter to American Express to prevent them from using the slogan. This dispute was litigated in court and the courts made two important determinations.  They are:

1. Slogans created by advertising agencies for a client or potential client's advertising campaign cannot be registered as trademarks by the agency. These slogans are created for clients to identify and distinguish the services of the client and not the advertising agency.

2. Simply displaying a trademark or servicemark in advertisement for services that are not yet available does not constitute use of the mark in commerce for trademarking puposes. Essentially, if there is not an exchange of goods or services in the marketplace, a trademark or servicemark right does not exist.  

Advertising agencies should be aware that if they create an advertising campagin for a client or potential client and the client does not use it, the agency cannot assert trademark rights. However, the advertising agency may assert a breach of contract or misappropriation claim for non-payment for creating the campagin.

I hope this information was helpful. Please contact me via email or leave a comment if you have any further questions.