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Smiley Face Is Serious to Company

By THOMAS CRAMPTON
Published: July 5, 2006

PARIS — In the battle of the smiley face, it’s not just who smiled first that counts, but also where and how.

Frown-inducing accusations have been flying in a trademark dispute between Wal-Mart Stores and a company owned by a French family over American commercial rights to the ubiquitous yellow symbol for happiness. Both parties say they expect victory when the United States 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 stands 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 the French trademark authorities in October 1971. “When it comes to commercial use, registration is what counts.”

What really counts is the lunacy of some people wanting to register everything from Santa Clause to the Tooth Fairy as a trademark and worse yet the government entities that grant those trademarks.

Unlike most countries in Europe and Asia, however, the United States operates under a system in which being the first to register a trademark bears less weight than being the first to exploit a symbol commercially, said Burkhart Goebel, the global head of the intellectual property practice at the law firm Lovells.

“We may live in the era of globalization, but trademarks are still rooted in territoriality,” Mr. Goebel said. “A trademark filed in one country has almost no impact in another.”

Marc E. Ackerman, a New York-based partner at the White & Case law firm and a specialist in United States trademark law, said, “Here in the U.S., we consider how heavily a trademark is used, and that would give SmileyWorld a big uphill battle.”

Yeah that and Wal-Mart’s lawyers can beat up Smiley World’s lawyers.

The most widely credited claim for inventing the smiley face goes to Harvey R. Ball, for the smiley yellow button he made for the State Mutual Life Assurance Company of America, a Massachusetts-based company, in 1963. Mr. Ball, a graphic artist, was paid $45 for creating 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 in Massachusetts.

Although irked by reports that Mr. Loufrani claimed to invent the smiley, Mr. Ball never attempted to trademark the symbol or commercially exploit it.

Mr. Loufrani, however, built a business from royalties collected on a symbol he claimed to have trademarked in 98 countries, for use over a wide range of product categories.

So basically this guy filed a bunch of trademarks on something he never invented and was not an original idea at all, governments granted him those trademarks, then he made a living charging people to use an idea that wasn’t his in the first place. Now he is complaining that the idea that was never his is being used without his permission and that his free lunch might be lost. Boo hoo.

He makes no monetary claim over the sent in e-mail messages (”That’s just punctuation”). But Mr. Loufrani said SmileyWorld did win a case last June 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 United States 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 Patent and Trademark Office because of the design’s common 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, Mr. Loufrani is a trademark troll registering the symbol in as many product categories as possible.

Exactly.

“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, Mr. Simley said.

That a happy face can cause such rancor should be no surprise, said Tom Blackett, the group deputy chairman of Interbrand, a branding consulting firm based in London.

“This dispute shows how much value companies put in symbols,” Mr. Blackett said. “In the era of distinctive trademarks like the Nike swoosh, companies will go a long way to defend their perceived territory.”

It was Forest Gump that
invented the Smiley face
Everyone knows that.
Run Forest Run!

Click on Forest to read
the rest of that story.