Smiley Philosophy Lost in Trade-mark Dispute between Wal-Mart and SmileyWorld

The familiar, happy-go-lucky "smiley face", thought by most people to be public property, is at the centre of a very unsmiling dispute over rights to the design and use of the graphic. In 1963, Harvey Ball was hired to create the smiley in order to cheer up employees during a stressful merger at an insurance company − significantly, he never attempted to obtain trade-mark protection for the symbol. A decade later, Franklin Loufrani founded SmileyWorld, a UK-based company, and began to register the graphic in a number of jurisdictions, beginning with France, and then to license its use. SmileyWorld's licensing revenue has grown to approximately $100 million a year and is very much dependant on the protection afforded by global trade-mark rights, with registrations now in 98 jurisdictions around the world. Meanwhile, Wal-Mart Stores Inc (Wal-Mart) had begun using the logo extensively in North America in connection with in-store promotions. After an initial failure to register the logo itself in the US, SmileyWorld changed tack and filed for a US trademark in 1997 for the exclusive right to the commercial use and licensing of the term "smiley" in association with the face logo. Wal-Mart opposed the registration, while at the same time filing its own application to register the design. In response, SmileyWorld filed a notice of opposition to Wal-Mart's application. The United States Patent Office is expected to rule later this year. The stakes are high in the dispute because SmileyWorld has said it intends to sell high-end products in exclusive smiley shops in Paris, Los Angeles and New York within the next two years. The saga is yet another example of painful financial consequences that flow from failing to seek sufficiently widespread geographic protection for IP rights. For the most recent news report, see: http://makeashorterlink.com/?X1D563E6D Summary by: Oren Weichenberg