Sunday, May 07, 2006

today's un -effin -believable story of the day---Wal-Mart Vies for Right to Put On a Happy Face


Wal-Mart Vies for Right to Put On a Happy Face

A Frenchman's trademark claim forces the retailer to go to bat for 'Mr. Smiley,' its version of a '70s icon.
By Abigail Goldman
Times Staff Writer

May 7, 2006


For decades, this feel-good symbol ☺ has encouraged millions to smile.

The happy face and "Have a Nice Day ☺" helped to define the '70s. With two dots and a pencil stroke, schoolchildren have brightened handwritten messages by filling in their O's with mini-smileys. These days, nary a cheery e-mail is complete without a typographical smile.

But now a bitter legal battle over smiley could be enough to make the happy little symbol :-(.

Wal-Mart Stores Inc., which uses a yellow happy face to try to put its shoppers in a carefree mood, is saying — with a straight face — that it has exclusive rights to the familiar image, at least among retail department stores.

The world's largest retailer is fighting a French native who has earned millions in licensing fees on smiley's back since the early 1970s, when he began securing trademarks for the happy face around the world.

It's the case of Mr. Smiley vs. le smiley.

The two sides are expected to wrap up their cases before the U.S. Patent and Trademark Office this summer, with a ruling sure to bring a smile to one side or another.

If Wal-Mart prevails, it could keep its competitors from festooning the symbol on plastic bags, name badges, balloons, handbags and just about anything else sold in stores, as well as the ads used to promote them.

The Frenchman, Franklin Loufrani, responded bluntly, sans happy face: No comment :-(.

But Wal-Mart spokesman John Simley, not to be confused with ☺, was happy to.

"It is kind of ironic that this whole dispute is about a smiley face," he said. "But in the end, it is what it is: It's a mark that we have a tremendous investment in and is very closely identified with our company."

Wal-Mart has invested billions of dollars through the years, Simley said, linking its name to the yellow circle with two dots for eyes and a cartoonish grin.

The company says it has officially been using what it calls Mr. Smiley since 1996 and in more limited ways long before that. But the company didn't move to register the trademark until someone else threatened to do so first, Simley said.

That was Loufrani, who began registering the happy face around the world more than 30 years ago and set up a company in London, SmileyWorld Ltd., to police its use.

Many people have claimed to have invented smiley. If you believe the movies, the title character in "Forrest Gump" inspired the icon when he wiped his muddy face with a T-shirt and gave the imprint to a struggling businessman who exploited the mark.

But, truth be told, the man widely credited with creating smiley was the late Harvey Ball, a Massachusetts graphic artist who was commissioned by an insurer in 1963 to reduce bad blood among employees after the company merged with a rival.

The original concept was just for the smile. Ball told the Telegram & Gazette of Worcester, Mass., in 1997 that he added the eyes so that a disgruntled employee couldn't turn the smile upside down to make a frown.

For his efforts, Ball earned little more than a song and a smile: $45.

By the time Ball thought to copyright the design in the 1970s, his happy face had already been reproduced at least 50 million times, making it part of the public domain. Since then, Kentucky has added smiley to its license plate, and the U.S. Postal Service issued a smiley stamp in 1999 as part of a tribute to the '70s.

But that was just in the United States.

Loufrani, who has claimed that he created le smiley after the 1968 student riots in Paris as a way to designate positive news stories, has trademarked the symbol in at least 80 countries, his lawyer said. So every time a happy-face button, T-shirt, face cream or hat is sold in those places, Loufrani, who his lawyer said was in his 60s, is supposed to get a cut.

It wasn't until 1997 that Loufrani applied to control the symbol in the United States. The patent office told him he couldn't claim the happy face, ruling that the mark was a widely used decorative symbol. So Loufrani went ahead with a request to trademark the word "smiley" coupled with the symbol.

Wal-Mart said it had no choice but to oppose Loufrani and seek to register Mr. Smiley for its use. Loufrani, in turn, filed legal papers opposing Wal-Mart's claim.

"For those of us who just live in the world, maybe it looks silly, but for those who are reaping a financial benefit, I think it's very important," said Steven Baron, Loufrani's Chicago-based attorney. "My client has spent lots and lots of time and his own money developing rights around the world in his mark, licensing those rights and earning a living from it. Wal-Mart has the market power basically to blow that out of the water."

Although all of this may sound a bit like registering sunshine or rainbows — or, for that matter, the ampersand — trademarking a ubiquitous symbol isn't necessarily frowned on, legal experts said.

Neil Netanel, a UCLA law school professor and an expert in copyright and trademark law, noted that apples were ubiquitous but that didn't stop Apple Computer Inc. from registering its name or its famous rainbowcolored trademark. The company took a common word and image, he said, and used it in a new context.

(That context recently raised the hackles of the Beatles' Apple Corps Ltd., which has claimed that the computer firm shouldn't be allowed to use the mark to sell music. But that's a different trademark suit.)

The difficulty for Wal-Mart could be in trying to prove that Mr. Smiley is distinctive and that most people associate the yellow happy face with the giant Bentonville, Ark.-based retailer.

When shoppers buy a shirt with Nike Inc.'s checkmark-like "swoosh" logo, Netanel said, they do so because they associate the mark with the company and with athletic endeavors, a link Nike has spent millions to create. The happy face is different, he said.

"It seems to me that when people walk around with a shirt with a smiley face on it, it's because they like the smiley face, it's not because they associate it with a company," Netanel said. "The value of it isn't in the goodwill of the company; it's that people like the illustration."

Wal-Mart insists that studies prove a high association between the company and Mr. Smiley.

"It's no surprise," Simley said. "When you consider that 180 million people shop at the stores every week and the number of times they would encounter the smiley face in the stores, you're in the trillions."

You might think a smiley symbol is merely a yellow circle with two dots and a curvy grin.

But this is what Wal-Mart lawyers see when they gaze into Mr. Smiley's eyes, according to one of their legal filings: "The 'smiley face' design is comprised of a circle, within which appears two dots, parallel to each other and in the upper third of the circle, approximating eyes in a human face, and an upturned parabola in the lower third of the circle, approximating a smile on a human face. The design appears sometimes with, sometimes without, lines perpendicular to the corners of the 'smile' element. It is usually represented in the color yellow."

Spokesman Simley said it was unclear what a Wal-Mart trademark on smiley might mean for other retailers that use the symbol.

But a Wal-Mart win probably won't mean the death of smileys rendered in e-mail. :-)

That's because Wal-Mart is applying to be the exclusive purveyor of smileys only among retail department stores.

Loufrani, however, had applied for a trademark in 16 categories that would have granted him rights to smiley on products including depilatory wax, swords — "a smiley on that would be very disarming," his lawyer said — and even animal semen. Happy cows, perhaps?

"Part of it is just staking your turf because you may want to get into those areas," said Baron, Loufrani's lawyer.

No matter who wins, many will wonder whether they'll have to cough up money to use smiley.

It's safe to say that if you're willing to pay for it, either side will say: Have a ☺ day.

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