The Andy Warhol Foundation for the Visual Arts owns many copyrights on the deceased artists’ works, and in keeping with Andy Warhol’s own statement that he would “endorse anything for money”, the Foundation has licensed many Warhol creations for commercial products. However, when the Foundation agreed to license the iconic banana image from the Velvet Underground’s 1967 first album, “The Velvet Underground and Nico” to Apple to use on iPhone and iPad cases, sleeves and bags, The Velvet Underground, which licenses the banana image as its trademark, protested. The Foundation, after receiving a cease and desist letter from the Velvet Underground’s lawyers, responded that the Foundation “may have” a copyright interest in the image that gave them a right to reproduce and license the image. The Foundation lawyer in 2009 even went as far as to claim that the Velvet Underground’s licensing activities infringed its copyright in the banana image, although there is no copyright registration by the Foundation for the image. The Foundation’s intellectual property counsel in 2011 boldly admitted in its correspondence with the Velvet Underground that “the banana design has been a consistent and prominent part of the [Warhol] Foundation’s licensing program for a number of years.” The Velvet Underground then sued the Foundation in New York federal court after it refused to stop licensing the banana image, claiming they should prevail because the banana is not copyrightable as being in the public domain, but is their trademark, and the Foundation is infringing their intellectual property.
The original image was taken from an advertisement and used by Warhol and the members of the band as part of their collaboration together at the time to create the album cover. The band split its $3000 advance from MGM for the rights to the recording with Warhol, in part as consideration for his furnishing the illustration for the album. No copyright symbol was included on the image when it was published on the album cover, and there was no deposit of it into the Copyright Office made by Warhol or anyone else. After its release, the album was withdrawn and rereleased with some changes to the back cover, which ironically contained a photograph furnished by Warhol that was infringing. Again no copyright symbol was affixed to the banana image, which, along with the deposit, was a prerequisite to copyright protection at that time under the 1909 Copyright Act. Therefore, the banana image immediately went into the public domain and was never able to be the subject of a copyright claim by Warhol or the Velvet Underground. The Velvet Underground’s first claim for relief urges the court to declare that the banana image is in the public domain and there are no copyright rights in the design. The VU then claims that it has used the iconic image in its licensed merchandising activity since at least 1993, it is immediately recognizable as a symbol of the VU, and that it has attained secondary and distinctive meaning under the trademark law to purchasers of goods bearing the design.
Even though the VU has not registered the banana symbol as its trademark in the Patent and Trademark Office, it cites a number of instances in the complaint of its use on goods to identify them as originating with the Velvet Underground. One example was a 2001 license granted to Absolut Vodka by the VU to use the banana design in an “Absolut Underground” national advertisement. (It is interesting to note that the Warhol Foundation also licensed one of its images to Absolut Vodka in 1994, according to its registration of the ad design in the Copyright Office.) The VU set out the elements of its claim to trademark protection: continuous use in trade or commerce for over five years, the retention of control over the use of the image to protect the buyers and to assure themselves that the goods in question are of the quality and type that the implied endorsement by the VU warrants. Consequently, the suit claims that the Foundation’s use of the banana design is likely to cause consumer confusion and lead to the belief that there is an affiliation or association between the VU and the Foundation’s licensee, which would cause the licensee to receive the benefit of the VU’s goodwill and reputation established over many years. This unauthorized use by the Foundation is claimed as a false designation of origin and unfair competition under §43 of the Lanham Act (15 U.S.C. § 1125) in Count II of the lawsuit, in which the VU also requests an injunction against the defendant asserting any right, title or interest in the mark, in addition to damages and profits received by the defendant Foundation from the use of VU’s trademark.
In its last claim for relief, the VU noted that the Foundation licenses many of its Andy Warhol art images for a range of products from stationery, clothing and watches to snowboards. The many images and designs owned by the Foundation have a fair market value of $120 million, and the licensing revenue earned from them is in excess of $2.5 million a year. With that in mind, the VU, in its count for unfair competition under New York common law, states that with all the lucrative images available for licensing by the Foundation, there was no economic need to use the banana design in its licensing activity. The complaint asserts that as an Andy Warhol design, the banana design is “fungible” to the Foundation, which can substitute any number of other Warhol designs it actually owns and which are in high demand by licensees. To the VU, the design is “not merely the graphic reproduction by Andy Warhol of a piece of fruit”; it is the “iconic” Velvet Underground Banana. A claim of misappropriation under the New York Common Law of the plaintiff’s benefits and property rights in the mark and its potential earnings follows.
This leads to a claim for exemplary damages from the Foundation as a kind of “greedy corporation” sanction, a demand for the Foundation to account for all monies and profits received so far for the licensing of the banana design, with interest, and a request that the court award costs, attorney fees and damages. For the Lanham Act violations, the VU also asks for treble damages, an injunction under 15 U.S.C. § 1116 (§ 34 of the Lanham Act) and an order under §1118 (§ 36 of the Lanham Act) that the defendant destroy all copies of the infringing products in its possession, custody or control, including products manufactured by defendant’s licensee. That would presumably lead to an epic bonfire of iPhone and iPad cases, sleeves and bags!
The Velvet Underground spends a considerable amount of space in the complaint reciting the history of the band, its legendary yet short lived status, and its iconoclastic music, which caught the attention of many young musicians. The album in question that contained the banana image was not a big seller at the time of its release, but has been described as “the most prophetic rock album ever made” by Rolling Stone, and twenty years after its release was recognized as one of the great rock albums and the Velvet Underground as one of the most influential bands of all time. Ironically, the members, who were known for their rejection of commercial values and their uncompromising attitude toward music, now earn income from the licensing of the iconic banana image to supplement their royalty income from their music. Even so, the Warhol Foundation’s appropriation of their trademark to add to their multimillion dollar annual earnings is rightly characterized as a usurpation of the band’s reputation and goodwill, one that is hurting the market for their own trademarked goods. It is also possible that the thought of losing millions of licensing dollars from Apple to the Foundation rankles the Velvet Underground’s members, making them think back to their anti-establishment days of the 60s when their integrity was about all they had, and they would not let it be compromised and stolen by a big corporation. Their continuous use of the iconic image that represents their band over many years as a trademark on their own products saved them from losing their goodwill and earnings to a much bigger and richer entity.
© 2012 Mary Ellen Tomazic
