Frown-inducing accusations have been flying in a trademark dispute between Wal-Mart and a company owned by a French family over US commercial rights to the ubiquitous yellow symbol for happiness. Both parties say they expect victory when the US Patent and Trademark Office rules on the case this summer.
Wal-Mart, the world's largest retailer, says the yellow face has long personified its price-reducing policy, while SmileyWorld, the London-based company that first registered rights to the symbol decades ago, says its globally established business is at risk.
"A prehistoric man probably invented the smiley face in some cave, but I certainly was the first to register it as a trademark," said Franklin Loufrani, 63, who says he initially registered the design with French trademark authorities in October 1971. "When it comes to commercial use, registration is what counts."
PHOTO: AP
Unlike most countries in Europe and Asia, however, the US operates under a system in which being the first to register a trademark carries less weight than being the first to exploit a symbol commercially, said Burkhart Goebel, the global head of intellectual property practice at Lovells law firm.
"We may live in the era of globalization, but trademarks are still rooted in territoriality," Goebel said. "A trademark filed in one country has almost no impact in another."
Marc Ackerman, a New York-based partner at the White & Case law firm and a specialist in US trademark law, said, "Here in the US, we consider how heavily a trademark is used, and that would give SmileyWorld a big uphill battle."
The most widely credited claim for inventing the smiley face is held by Harvey Ball for the smiley yellow button he made for the State Mutual Life Assurance Company of America in Massachusetts in 1963. Ball, a graphic artist, was paid US$45 to create a button intended to cheer employees during a rocky merger with an out-of-town company, according to his 2001 obituary in The Worcester Telegram & Gazette.
Although irked by reports that Loufrani claimed to invent the smiley, Ball never attempted to trademark the symbol or commercially exploit it.
Loufrani, however, built a business from royalties collected on the symbol, which he claimed to have trademarked in 98 countries, for use in a wide range of product categories. Loufrani said SmileyWorld won a case in June 2005 against the use of a smiley face on the home page of AOL France.
The battle with Wal-Mart was touched off when SmileyWorld filed for a US trademark in 1997 for the exclusive right to commercial use and licensing of the term "smiley" in conjunction with the face logo. SmileyWorld's original application, which tried to trademark the smiley face itself, was rejected by the US patent office because of the design's widespread use, according to the company's lawyer, Steven Baron.
To Wal-Mart, which has photographs of smiley faces in its stores dating back to 1996, Loufrani is a trademark troll registering the symbol in as many product categories as possible.
"They are applying for rights over the smiley face in product categories that include animal semen," John Simley, a Wal-Mart spokesman, said. "It shows they are trying to trademark everything they possibly can."
Wal-Mart lodged a notice of opposition to SmileyWorld's trademark application and then filed a separate application to trademark the smiley face in relation to retail services.
In response, SmileyWorld filed a notice of opposition to Wal-Mart's application on the grounds that its own attempt to trademark the face had been rejected. To overcome objections that the smiley face is within the public domain, Wal-Mart asserts a long history of "prior use" in retail services, Simley said.
That a happy face can cause such rancor should be no surprise, said Tom Blackett, group deputy chairman of Interbrand, a branding consulting firm based in London.
"This dispute shows how much value companies put in symbols," he said. "In the era of distinctive trademarks like the Nike swoosh, companies will go a long way to defend their perceived territory."
With legal fees topping half a million US dollars, the Wal-Mart dispute is the most costly SmileyWorld has ever faced.
SmileyWorld was also awarded 2,500 euros (US$3,125) last March in a case in a French court against French retailer Pier Import.
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