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The Velvet Underground ( an iconic rock group from the 1960’s for those of you who have never lived in a world without MTV) has filed a trademark and unfair competition lawsuit in Manhattan federal court against the Andy Warhol Foundation for the Visual Arts stemming from the Foundation’s use of the iconic banana image that was on the cover of the Velvet Underground’s 1967 debut album, The Velvet Underground and Nico. Band leaders Lou Reed and John Cale take the position that the foundation has illegally licensed the image for use on various products, including iPad cases. Cale and Reed allege that the foundation is trying to “deceive the public” into believing that the band, “VU,” has given its “sponsorship or approval” to this merchandise.The complaint seeks damages for trademark infringement and unfair competition and makes this statement to support its unfair competition claims: “Inasmuch as the Warhol Foundation has such a large number of Andy Warhol designs, all of which are presumably unique works that are highly valued in the marketplace, there would appear to be no economic need to include the banana design among the designs that defendant licenses.” In other words, since there are a lot of other Warhol designs the Foundation could choose to commercialize, the fact that it selected this particular one proves that the defendant is trading on the goodwill of the Velvet Underground.

Andy Warhol did more than paint Campbell soup cans and hang out with Edie Sedgwick during the 1960’s. He was also serving as the Velvet Underground’s manager and producer, and he created the famous banana logo – which includes the phrase “peel slowly and see” – from an advertisement taken from the public domain. Warhol was paid part of the band’s label advance for the design but never registered the image with the US Copyright Office. While this could theoretically mean that Warhol and now the Foundation have common law copyrights in the design, the Complaint denies that this is the case. The Velvet Underground says the Warhol Foundation lost any claim to the image by repeatedly publishing it without a copyright notice.

“The Warhol Foundation has sought to justify its unlawful licensing activities involving the mark by asserting that it has a copyright interest in the banana design, despite the incontrovertible fact that the banana design, insofar as copyright rights are concerned, is in the public domain,” the complaint states. “The banana design was first published in 1967, and continuously and repeatedly afterwards, without any copyright notice, and neither Andy Warhol, the Warhol Foundation, nor anyone else, has applied for registration of any copyright or deposited any sample of the work with the Copyright Office. Under the applicable copyright law – which is the Copyright Act in effect from July 1, 1909 through December 31, 1977 (the ‘1909 Act’) – such publication without a copyright notice irrevocably placed the banana design in the public domain, if it was not there already.”

In addition to seeking unspecified damages, the Plaintiff wants a declaratory judgment that the Foundation has no copyright in the Warhol image.

As far as I can tell, the Velvet Underground never obtained a federal trademark registration for the cover and the Complaint does not allege that they have. If that’s the case, they only have common law trademark rights. While you can certainly still sue under the Lanham Act without a registration, I have always believed that judges and juries are bound to wonder, “if this mark is so valuable, why didn’t you register it?” In other words, it makes it hard to convince folks that there is irreparable harm happening, in my humble opinion. Regardless of whether there is or is not a registration, the VU is going to have to establish that there is a likelihood of confusion with its marks and the usage the Foundation is making, i.e., on iPad covers. The complaint alleges that the VU mark has been used in connection with live musical performances, vodka, and VU merchandise. Consequently, I’m not sure how the VU is going to establish that it has rights that extend into the arena of iPad covers. Are consumers likely to believe that iPads emanate from the same source as live musical performances and vodka?  I would think not.

If the design is in the public domain, as the plaintiff alleges, can’t anyone use it on goods to which the plaintiff’s common law trademark does not extend? While I think the Velvet Underground will likely be able to establish trademark usage and secondary meaning in the album cover, I don’t think they are going to be able to extend it as far as they want it to go. If this is the case, it may be a mistake to seek a declaration that the Warhol banana design is in the public domain. If the plaintiff receives a holding that the image is in the public domain, then anyone would be able to use it on any product that would not be likely to be confused with live musical performances, vodka, and VU. At least if they are only fighting the Warhol Foundation, they know they are dealing with a reputable outfit that is likely to only license the mark on “appropriate” goods. And, the foundation would have the motive and means to police copyright infringements of it. If I were the VU, I would shudder to think what products this public domain “banana” with the possibly suggestive slogan “peel slowly and see” could be applied to in the event it is determined to be in the public domain and how much in legal fees it would take to constantly address that. Hey, people need something to sell on all those new .XXX domains.

The case is The Velvet Underground v. The Andy Warhol Foundation for the Visual Arts, 12-0201, U.S. District Court, Southern District of New York (Manhattan).