bluecake

When you walk through a bakery and see a cake with Disney Frozen characters on it, do you ask yourself – did Disney allow that?   At birthday parties, you see many themed parties and theme cakes – parents want to have a character cake for their child’s birthday.  A baker/cake decorator may wonder what are the legal risks in making and selling such cakes?  They do not want to lose a sale, but they don’t want to find themselves in legal trouble either.  Some may wonder how will the owner of these characters even find out if I make a cake with a character on it or even care?

The copyright owners of the character artwork do care and, particularly with social media today (everyone at the party taking pictures of the cake and posting on Twitter, Facebook and Instagram etc), it is easier to find such unauthorized works.  This post explores basic legal issues in the cake decorating business. 

Like many other types of creative work, when you make a cake using other people’s works, ideas, images or trademarks, many intellectual property laws come into play.  This article briefly touches on the 3 main issues that can appear in cake decorating:  copyright infringement, trademark infringement, and violation of right of publicity.

Copyright issues

Copyrights subsist in original works of authorship fixed in a tangible medium.  Examples of copyright materials, to name just a few, include items such as artwork, sculptures, novels, software and even website content. The owner of the copyright work holds six exclusive rights, which are as follows – the right to:

  1. Reproduce the work
  2. Prepare derivative works
  3. Distribute the work to the public by sale or rental
  4. Perform the work publicly
  5. Display the work publicly
  6. In the case of sound recordings, the right to perform work publicly by means of digital audio transmission.

Except in limited circumstances known as “fair use,” it is generally an infringement to engage in one or more of the above infringing acts without permission (an express license) from the owner.  So, for example, replicating a character from a Disney movie on a cake is a derivative work, and without a license, or a finding of fair use, is a copyright infringement.  While making such a cake inside your home for your personal use is most likely a fair use, selling, donating or transferring that cake to another person (whether or not for money) is most likely not a fair use.

Trademark issues

There are also trademark issues to consider in cake decorating as well. Trademarks are words, designs, tag lines or combinations of a word, design and/or tag line that are used in connection with a good or services and that identify the source of the goods or services, and distinguish the goods or services of one party from those of another. Examples of trademarks include the Nike design, the word Pepsi, a sports team name or logo and even the name and design of characters such as Mickey Mouse.   Trademark law also encompasses the concept of “famous marks” – famous marks have special enhanced protection from tarnishment and dilution – that is, where a use that itself might not infringe, would tarnish or dilute the value of the mark.  For example, many Disney trademarks are famous.  Trademark owners need to protect their rights in their trademarks as well, and in fact, if a trademark owner does not enforce their trademark rights, they run a significant legal risk in losing their trademark rights.  Unlike copyright law, which has express fair use provisions, fair use in trademark law is much more limited – generally, fair use occurs in comparative advertising, and “nominative” fair use, that is, where the only way to express the particular communication is to use the trademark to identify the products or services of the trademark owner.

Publicity rights

Publicity rights are rights certain individuals (and deceased persons) have to their name, likeness or image.  For example, Elvis Presley died long ago; however, his estate has significant rights of publicity and use of his image on a cake may violate those rights.  The same may be true for celebrities and other persons who use their publicity rights and would expect payment for their use.

As an example, suppose you were asked to create a “Blues Brothers” themed cake.  So you replicate the fictional characters of Jake and Elwood Blues (played by Dan Akroyd and John Belushi), in their signature black suits and fedoras.  You title the cake “Have a Blues Brothers Birthday” and collect your fee.  Have you infringed (a) the copyrights in the movie? (b) the trademarks in the character rights? (c) the publicity rights of Dan Akroyd and John Belushi?

As a cake baker/decorator, you should take the rights held by copyright, trademark and individuals holding publicity rights seriously.  These owners need to watch over their copyright and trademark rights to protect the value in the property, and with social media today, the tools to discover infringement by others is more readily available to the owner.   People love to display the beautiful cakes that were made for their child’s party (or any event). Thus, photos of the cakes are displayed all over the internet.

Remedies for Infringement

If you are found by a court to have infringed upon someone’s copyright, trademark or publicity rights, it can be a very costly for you. Actually, even if threatened with an infringement action, the costs can be high in defending the matter.

For example, a copyright owner’s main remedy in a copyright infringement claim is typically an injunction, as the plaintiff wants the infringing activity to cease. However, a court may award damages as well. If the plaintiff does not hold a registered copyright in the work, they may seek actual damages. However, where a plaintiff holds timely filed registered copyrights, damages can range from $700-30,000 per violation, and up to $150,000 for willful infringement. With trademark infringement, plaintiffs typically seek injunctions, but given the circumstances may also seek damages such as lost profits, treble damages or punitive damages (in some states) and attorneys’ fees where infringement is willful and deliberate.  If you violate a right of publicity, significant compensatory damages can be awarded to the celebrity whose images were used without their permission.

Obtaining Permission

Using someone’s copyright without permission for your cake is a high risk to take (unless you fall under an exception such as fair use or first sale doctrine). Thus, prior to making such a cake, you should obtain written permission (a license) from the copyright/trademark owner.  Finding the owner is not necessarily an easy task and can take some time, but obtaining permission is important and can be done. Many companies have departments that handle providing permission to use their work. Some may give you permission for free, many will require a license fee (and some could be expensive), and unfortunately, some may not allow it at all. The permission is typically known as a license – and it is very important to read the terms of the license so you are aware of the permitted uses and of any restrictions. For instance, a license that says the work is for personal use only would not permit you as a baker to use the work to make and sell cakes to third parties.   If you intend to make character cakes in bulk, you may want to seek the permission yourself. However, if you make such cakes only here and there, you may want to ask the customer to obtain the written permission for you to use the work to make the cake.

Many cake makers question whether purchasing a baking pan of a character image in a store gives them the right to use the pan and sell the resulting cake.  A cake maker could resell the baking pan itself under the first sale doctrine.  However, the pan does not come with an implied license to reproduce the image and to distribute to others – the pan is typically sold for personal use only.  For example, using a Disney character pan without a license is no different than hand drawing the character.

Note that this permission is not just for character cakes.  Rather, this is the case for any image that you see on a website as well. When you see an image on the Internet, it is best to assume that someone owns the image (whether it is a photographer, company, celebrity, etc.). Always look for the source and read the terms of the license before freely using the images. Some sources (such as images on Creative Commons or ClipArt) may allow the use, but you still need to read the terms to see if there are any restrictions, or even a nominal license fee.

Finally, note that making a cake for free for someone does not necessarily avoid infringement.  Just because a cake is made for free does not mean it falls under a defense of fair use – whether you receive money or not is one, but only one, factor under the fair use doctrine; and it does not necessarily avoid the copyright owner’s exclusive right to reproduce the work or prepare a derivative work. There is more of defense if you make a cake for a relative or as a gift to a personal friend; but it is still a tricky area.

Thus, to be prudent and stay away from legal consequences, steer away from the temptation to reproduce and distribute a cake with another’s copyright or trademark without written permission from the copyright/trademark owner.  If you are making a custom cake and there is a question, it is best practice to obtain an indemnification from the person who has ordered the cake, such that if a copyright, trademark or right of publicity claim is made, you can have the person who asked you to make the cake pay the licensing and infringement costs, as well as defend the claim.

For more information, contact Kim Grimsley at kim@olivergrimsley.com.