scp1127 Posted 21 May 2012 , 5:32pm
post #1 of

Remember all those CC members who constantly tell me to mind my own business and that I'm not the cake police?

Well, guess what... it turns out that I have been warning people to follow the law for good reason.

For those of you who enjoy making cakes of protected property, please read the attached article:

http://www.bloomberg.com/news/2012-05-21/music-downloading-damages-left-intact-by-u-s-high-court.html

The courts handed down a fine to an individual who not only did not sell the property, but also had only thirty individual violations, much less than some of the portfolios on CC. This case involved a man who illegally downloaded 30 songs and shared them.

Evidently, the fine is from $750.00 to $150,000 per violation. He was charged $22,000 for each violation, grand totalling $675,000. Several courts have upheld the amount.

How many times have I quoted that the Feds put the number of violations at 10 to convert the charge into a federal criminal charge? It had a purpose.

If I were a decorator with published protected material, I would take it down now. Even though many of the photos will be cached, I would think that a voluntary cease and desist would help.

While you are at it, be sure to check your kids' iPod accounts for music downloaded by other than proper channels.

When members like me, Jason, and others warn you all about this, we aren't trying to be disagreeable, but professional. For businesses operating outside the law, beware that the internet will not be on your side. It has allowed us to share, find answers to everything, and grow our businesses virtually (pun) for free. But with that comes a trail right back to you for copyright/trademark infringements, evidence of selling for the IRS and state tax depts (example: I sold this cake for $$ in a post on CC). The IRS only needs evidence of one item to search your books and household income from "the day you were born" or to asses you with taxes and penalties for what you may have sold.

Again, not an "I told you so", but a message that will hopefully reinforce two things:

1) Please make sure you fully understand the penalties for working outside the law.

2) If you choose to work outside the law, do not publish it on the web.

51 replies
Amberwaves Posted 21 May 2012 , 7:24pm
post #2 of

I don't believe there are enough extra people to take the time to go after all the cake copyright infringers that are out there now.

Just for fun the other day I Googled Hello Kitty cakes. Wow! ALL those cakes were made for free or given to family members? Riiiiiiiiggght. Even Cake Lava in Hawaii makes EXPENSIVE Hello Kitty cakes, but I suppose it's possible someone of that caliber may have permission from the copyright owner.

scp1127 Posted 21 May 2012 , 7:36pm
post #3 of

For $150,000 a pop, there can be plenty. This case will lead to entrepreneurs who will open up law firms for just such cases. They are already there, but with this publicity and the sinking incomes of lawyers in this recession, there will be plenty of enterprising people to make this happen.

For the internet, the evidence is online with the infringer's address. A simple and cheap prosceution for the plaintiffs.

kelleym Posted 21 May 2012 , 9:33pm
post #4 of

As always, it's best to consult a lawyer rather than a cake forum for legal advice. Copyright infringement is bad, talk to a lawyer about it. Here is an article my attorney wrote about it at my request.

http://www.klonglaw.com/blog/selling-copyrighted-character-cakes-should-you-do-it

scp1127 Posted 21 May 2012 , 9:47pm
post #5 of

I wasn't posting legal advice. It was an article that reiterated what many of us have been posting for years. This happens to be concrete evidence of a case tried and won with no exchange of money.

Copyright and trademark laws are actually very easy to interpret by just about anyone and there are numerous sites that explain it in layman's terms. Just google it and an abundance of reputable sites will give great information.

CC members still have a choice. I just made a suggestion.

kelleym Posted 21 May 2012 , 10:06pm
post #6 of
Quote:
Originally Posted by scp1127



Copyright and trademark laws are actually very easy to interpret by just about anyone and there are numerous sites that explain it in layman's terms. Just google it and an abundance of reputable sites will give great information.



Having been personally involved in a trademark lawsuit, I must disagree, and I find that assumption rather unfounded. There's a reason we have lawyers and courts and judges, because "just about anyone" can see two sides of a story. Getting your legal advice from The Internets is like being sick and entering your symptoms into WebMD. You might get close to the truth, but you also might diagnose yourself with a brain tumor when you have a common cold.

gatorcake Posted 21 May 2012 , 10:43pm
post #7 of
Quote:
Originally Posted by scp1127

For $150,000 a pop, there can be plenty. This case will lead to entrepreneurs who will open up law firms for just such cases. They are already there, but with this publicity and the sinking incomes of lawyers in this recession, there will be plenty of enterprising people to make this happen.

For the internet, the evidence is online with the infringer's address. A simple and cheap prosceution for the plaintiffs.




You have a good point, you really do. And then you engage in this scare mongering. First there are conditions for the $150,000 limit it and one of those pertains to reasonableness of the fine imposed. Second the copyright holder has to file suit. Corporations already have legal representation, your description of attorneys hanging a shingle so they can pursue copyright infringements is just plain silly. Does this mean that copyright holder will not attempt to protect their interests--of course not.

Sorry we are not going to see copyright "ambulance chasing." It does not work that way as the vast majority of the kinds of works that are replicated in designs already have legal representation. There is simply no reason to be hyperbolic it does nothing more than trivialize the point.

scp1127 Posted 22 May 2012 , 1:09am
post #8 of

If you all are somehow insinuating that whether or not to make a John Deere tractor out of gumpaste is a highly subjective case of copyright/trademark infringement, sorry, it's a piece of a cake.

Yes, of course, there are highly subjective cases, but Hello Kitty, Spongebob, and Elmo cakes certainly do not fall into that category. So the simplistic explanations on the web will be more than sufficient in determining if the Thomas The Train cake you want to sell falls into the category of infringement. Give me a break.

It is funny and I always anticipate the few who always try to attack anything I say. I referred to this in a thread the other day. And again, a point I was trying to make in the best interest of the cake community disintigrates into critiquing my message. Same people, same story, broken record.

When your only point is to pick at what I tried to make as elementary as possible, I really don't care. The Feds have an abundance of task forces out there busting internet infringers. This is newer. The music industry has had attorneys working on this since the day the songs began to appear on the web. If there is money in it, the lawyers will come. It only gets easier and easier to prosecute once the prescedents are set and the computer programs for detection are perfected. The internet is still relatively new. But enforcement of those laws will eventually become common on the web.

Again, my point was to share the article and give people the opportunity to decide where they want to stand on the issue of protected property given the concrete information.

Yes, those chosen few will always look for and chime in on my posts and try to tear down the message. But I hope my general message is received in the manner that I intended... maybe a few people will reconsider the practice of replicating protected property and avoid a similar situation. This man in the article doesn't even have a job, but as soon as he does, the courts are going to attach his wages and will expect full payment.

Norasmom Posted 22 May 2012 , 1:53am
post #9 of

On Facebook, there is a fan page by the creators of Dora. Guess what they post? Pictures of people's Dora cakes...and some were DEFINITELY professional looking...as in sold to the customer, (I'm just guessing there were no trademark rights bought...)
I just find it interesting! I don't do character cakes.

https://www.facebook.com/dora

jason_kraft Posted 22 May 2012 , 2:10am
Quote:
Originally Posted by gatorcake

First there are conditions for the $150,000 limit it and one of those pertains to reasonableness of the fine imposed.



The case linked to in the OP is a little unusual...based on the article it seems like there were thousands of violations, but only 30 of which pertained to the plaintiff's IP. The jury seemed to set the penalty for each of those 30 songs as a punitive measure applying to the aggregate total of violations.

Frankly I'm surprised SCOTUS upheld the award as it does seem excessive, but now that they have weighed in you will probably see more infringement suits (the vast majority of which will be settled out of court).

The basics of IP law are relatively straightforward, so there's no harm in learning more about it yourself. But as posted above, the specifics of cases can be complex so if you are a party to a legal communication or lawsuit you'll want to talk to your liability insurance provider and get an attorney.

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Corporations already have legal representation, your description of attorneys hanging a shingle so they can pursue copyright infringements is just plain silly.



I don't see what's so silly about it. There are already many lawyers specializing in copyright law (see the link below to find a list in your area) so it doesn't seem farfetched that they would want a piece of infringement settlements, especially when there is so much low-hanging fruit.

http://lawyers.findlaw.com/lawyer/practice/Intellectual-Property-Law

Looking at it from a risk vs. reward perspective, an IP owner engaging an outside search firm to take care of this could be quite profitable as long as care is taken not to damage the IP owner's reputation (as the music industry did when they went after little kids for illegal downloading). This would also free up in-house legal teams for companies that have a lot of value tied up in IP to focus on bigger issues like China.

Here is one example of a company that already does this:
http://www.cyberalert.com/app_intellectual_property_infringement.html

jason_kraft Posted 22 May 2012 , 2:17am
Quote:
Originally Posted by scp1127

This man in the article doesn't even have a job, but as soon as he does, the courts are going to attach his wages and will expect full payment.



The defendant in the article will probably just file BK (bankruptcy), the hit to his credit is probably preferable to owing $675K.

If a judgment like this were to hit someone with an LLC and liability insurance did not pay, they might be able to just have the LLC file BK (assuming no personally-responsible debt) with limited impact to their own credit and start a new LLC. Of course a lawyer would be a must in this type of situation.

If an uninsured sole prop were sued there would be no protection (regardless of whether they were legal from the health dept perspective), so the defendant would have to either hire a lawyer with out of pocket funds, accept the settlement and pay (which could involve losing their home depending on the size of the settlement), or file BK (which may or may not involve losing their home).

ladyellam Posted 22 May 2012 , 2:29am

Scp1127 I just have a quick question to ask you. Did you just make an Old Bay container for your stew cake? I'm sure you got permission to replicate it, correct?

jason_kraft Posted 22 May 2012 , 2:30am
Quote:
Originally Posted by Norasmom

On Facebook, there is a fan page by the creators of Dora. Guess what they post? Pictures of people's Dora cakes...and some were DEFINITELY professional looking...as in sold to the customer, (I'm just guessing there were no trademark rights bought...)
I just find it interesting! I don't do character cakes.

https://www.facebook.com/dora



In large companies like Viacom (which owns Nickelodeon and the rights to Dora) you often don't have very good communication between divisions. It's possible that the marketing group that runs the official Dora FB page linked above got permission from legal, but it's also possible that Viacom's legal team would not be happy at all with the tacit permission granted by adding a potentially infringing cake to the official photo gallery.

jason_kraft Posted 22 May 2012 , 2:36am
Quote:
Originally Posted by ladyellam

Scp1127 I just have a quick question to ask you. Did you just make an Old Bay container for your stew cake? I'm sure you got permission to replicate it, correct?



Right, because if she didn't get permission, that means all her points are automatically invalid. icon_rolleyes.gif

Evoir Posted 22 May 2012 , 3:00am
Quote:
Originally Posted by ladyellam

Scp1127 I just have a quick question to ask you. Did you just make an Old Bay container for your stew cake? I'm sure you got permission to replicate it, correct?





1. Its not her cake.
2. Yes, the decorator in question DID get permission.

sugarpixy Posted 22 May 2012 , 4:07am

Well I dont know about anyone else, but I wish these companies would realize how much money they could make by making the figurines available to cake decorators in candle for or sugar molded. There are some but not a lot and they are not for commercial use. I would much rather make sugar flowers than figurines any day!
If the music industry had tapped into what the consumer wanted they would be much richer today (I know that they are already super rich) and would not have to spend money on prosecuting nabsters.

ladyellam Posted 22 May 2012 , 4:52am

I apologise to scp1127.

This place is so exhausting and please Jason, I know how you love to write and write but honestly you don't need to reply to this. It was a simple apology to scp1127

jason_kraft Posted 22 May 2012 , 5:33am
Quote:
Originally Posted by sugarpixy

Well I don�t know about anyone else, but I wish these companies would realize how much money they could make by making the figurines available to cake decorators in candle for or sugar molded. There are some but not a lot and they are not for commercial use. I would much rather make sugar flowers than figurines any day!



That's actually a really interesting idea for a business. It would require buy-in from the IP owners, but if you were able to talk to the right people at, say, Disney and work out a business plan with projections for profits from consumable licensed figurines you might really be on to something. Of course this would also involve stepped-up enforcement of copyright infringement to increase the market for said figurines.

VanillaSky Posted 22 May 2012 , 11:05am

I don't think that the copyright issues associated with the music industry are the same as the ones for caking, because the incentives for music copyright owners to enforce their copyrights are far stronger than for a company, even Disney, to go after casual violators making Mickey Mouse cakes.

The music industry sells songs to the public. If a person downloads a song illegally, the record company, artists, etc do not get the money they would get from someone who buys that song. If enough people do this, the music industry is seriously harmed. The music industry is struggling with album sales. It pays for them to crack down on illegal down loaders. They don't have the resources to go after everyone so they go after the heavy downloaders and have also, at times, gone after casual downloaders, to make a public example of them. Many people, but not everyone, believe downloading is stealing, even people who do it anyway, so when the music industry goes after casual downloaders, they do not take a huge public relations hit.

As for character cakes, most companies need to protect the characters they own so they can make money off of selling movies,toys, etc of of these characters. Somebody making a Mickey Mouse cake doesn't directly hurt Disney's profits in the same way as someone illegally downloading music - where you get the final product without paying for it. That said, companies do need to show that they make efforts to protect their Intellectual property from violations, so companies will usually send cease and desist letters to violators that that become aware of. You don't usually see the aggressive tactics that the music industry takes for a variety of reasons, but one of them is that going after a mom and pop bakery in court without first giving them a warning to stop would be a PR nightmare for a company, which defeats the point of protecting the brand.

gatorcake Posted 22 May 2012 , 1:24pm
Quote:
Originally Posted by jason_kraft

Frankly I'm surprised SCOTUS upheld the award as it does seem excessive, but now that they have weighed in you will probably see more infringement suits (the vast majority of which will be settled out of court).




Did you read the article? SCOTUS did not uphold the award, they refused to hear the appeal, there is a difference. They can refuse to hear a case for any number of reasons, the refusal means the case returns to the district court. The case is not over. The appellate court decision leaves open the possibility for the award to be reduced again--if it is the plaintiff gets a new trial. This is in the article.

What the refusal means is still uncertain as the case is not settled. The district court could opt to reduce the fine again. The defendant has vowed to keep pursuing his case so it is far from over. Acting as if this is now settled case law is simply premature. And speculating as to the significance of the decision in terms of future suits is just that idle speculation. There is nothing to suggest that the case would be a landmark decision for the prosecution of infringements.


Quote:
Originally Posted by jason_kraft


I don't see what's so silly about it. There are already many lawyers specializing in copyright law (see the link below to find a list in your area) so it doesn't seem farfetched that they would want a piece of infringement settlements, especially when there is so much low-hanging fruit.

Here is one example of a company that already does this:
http://www.cyberalert.com/app_intellectual_property_infringement.html




Relevance? First the response was to the claim that this decision would set off a bunch of copyright ambulance chasing. It is not with the claim that there are firms out there that already specialize in copyright infringement. Second you really think Disney is going to hire some unproven new firm? No. This environment is not the same a personal injury lawyers-there are no clients to troll for. They have legal representation already.

As for your example: it is not the example of attorneys pursing clients to get some monster award because of a poor economic climate. It is a company that searches the internet for instances of violation. It is a security/monitoring service and does not offer legal services. The existence of the one does not mean that a spate of attorneys are now going to rush to pursue copyright infringements when a) those companies already have representation and b) there are already established firms.

So yes the point was just silly and unnecessary. The decision is not a green light to attorneys, that green light already exists. One need not throw out "you could be subjected to a $150,000 fine" as the reasonably imposed fines would be devastating enough. You can side with this hyperbole if you want, but frankly all it does is trivialize the message. Is there are reason for concern? Yes. Is that a reason to live in fear of an army of attorneys seeking $150,000 fines? No.

ReneeFLL Posted 22 May 2012 , 1:58pm

Personally, I think that if Disney or any other big company were to go after someone for copyright infringements it would be the famous big bakers who post their cakes for all to see on tv and elsewhere. They would have a much better chance of getting $$ out of them than a small time baker. Does this mean that they won't go after small time bakers? Probably not. I am wondering if a big company goes after a small baker, if they chose to on their own or if someone reported them.

MimiFix Posted 22 May 2012 , 2:11pm

I worked for a national company and they went after anyone, for any reason, regardless of how small the perceived infringement. They once sent a notice to a licensed home baker with a business name that was similar to, but not the same as (and would not have been confused with my employer). They told her to change her business name or she would hear from them again. It seemed so petty, but this was their stance.

jason_kraft Posted 22 May 2012 , 3:17pm
Quote:
Originally Posted by gatorcake

Did you read the article? SCOTUS did not uphold the award, they refused to hear the appeal, there is a difference. They can refuse to hear a case for any number of reasons, the refusal means the case returns to the district court. The case is not over. The appellate court decision leaves open the possibility for the award to be reduced again--if it is the plaintiff gets a new trial. This is in the article.



You're right that SCOTUS did refuse to see the case instead of upholding it (my bad), but when a case is not heard by SCOTUS the last decision stands (in this case it is the 1st Circuit Appeals decision reinstating the $675K judgment) and the case is closed, no further appeals are possible.

If SCOTUS heard the appeal and sent it back to a lower court that would be a different story and the case would still be open, but that didn't happen here.

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Relevance? First the response was to the claim that this decision would set off a bunch of copyright ambulance chasing. It is not with the claim that there are firms out there that already specialize in copyright infringement.



Your claim was that it was silly for firms to hang out a shingle to pursue copyright infringement, I present an example of a firm that already does this along with a link to find lawyers across the country who offer this service.

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Second you really think Disney is going to hire some unproven new firm? No.



Of course not, firms would need to be vetted just like any other RFP. It doesn't necessarily have to be a brand new firm either.

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This environment is not the same a personal injury lawyers-there are no clients to troll for. They have legal representation already.



As I stated in my earlier post, in-house legal teams are usually focused on bigger matters than relatively small-time infringement. A third-party firm sending out infringement letters could be quite profitable for both the firm and the IP owner, even if the settlements are relatively small...now that SCOTUS has refused to hear this case, recipients of these letters would be even more willing to settle.

jason_kraft Posted 22 May 2012 , 3:32pm
Quote:
Originally Posted by VanillaSky

As for character cakes, most companies need to protect the characters they own so they can make money off of selling movies,toys, etc of of these characters. Somebody making a Mickey Mouse cake doesn't directly hurt Disney's profits in the same way as someone illegally downloading music - where you get the final product without paying for it.



Sure they do. Disney licenses decopacs, so someone copying Mickey Mouse is illegally using someone else's work without having to paying for it (by buying the decopac or negotiating a license on your own). Even if there were no licensed products available and the company did not grant licenses, as the owner of the IP the company has the right to control how it is used.

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but one of them is that going after a mom and pop bakery in court without first giving them a warning to stop would be a PR nightmare for a company, which defeats the point of protecting the brand.



Agreed, there is definitely a fine line between protecting IP and alienating customers.

ReneeFLL Posted 22 May 2012 , 3:36pm
Quote:
Originally Posted by MimiFix

I worked for a national company and they went after anyone, for any reason, regardless of how small the perceived infringement. They once sent a notice to a licensed home baker with a business name that was similar to, but not the same as (and would not have been confused with my employer). They told her to change her business name or she would hear from them again. It seemed so petty, but this was their stance.




Just curious, do you know if she changed her name? Do you know if they would have really gone after her if she didn't? I would think that if there would be no confusing the two companies that she would have been able to fight it. Now if it had the name Disney in it, that I can understand.

In this day and age there are so many names out there that are a little similar, I don't think that they would have a leg to stand on. Especially if they would not be confused, but I could be wrong. Jason or anyone else know?

jason_kraft Posted 22 May 2012 , 3:48pm
Quote:
Originally Posted by ReneeFLL

In this day and age there are so many names out there that are a little similar, I don't think that they would have a leg to stand on. Especially if they would not be confused, but I could be wrong. Jason or anyone else know?



There are several factors considered when looking at likelihood of confusion in trademark infringement (which is usually what business name conflicts involve):

Strength of the mark
Proximity of the goods
Similarity of the marks
Evidence of actual confusion
Marketing channels used
Type of goods and the degree of care likely to be exercised by the purchaser
Defendant's intent in selecting the mark
Likelihood of expansion of the product lines

So if this national company was a bakery in another state but sold wholesale throughout the US they might win the case. In most cases it would never get to trial though, it would be much cheaper for a home bakery to change its name than to spend time and money on a lawsuit.

http://en.wikipedia.org/wiki/Trademark_infringement

costumeczar Posted 22 May 2012 , 5:36pm
Quote:
Originally Posted by Evoir

Quote:
Originally Posted by ladyellam

Scp1127 I just have a quick question to ask you. Did you just make an Old Bay container for your stew cake? I'm sure you got permission to replicate it, correct?




1. Its not her cake.
2. Yes, the decorator in question DID get permission.




that was my cake, and yes, I did get permission. If you want to go to the Old Bay facebook page and look at the "comments posted by other people" area, you'll find my request, their approval, and their comments about how much they liked the cake. icon_smile.gif

costumeczar Posted 22 May 2012 , 5:40pm

...Becasue I do ask for permission, and I have a fat file of permission letters to show for it.

I love this topic...People like to say that it doesn't matter until someone takes a photo of another decorator's cakes and puts it on their website, then all of a sudden it's torches and pitchforks. Getting permission from a copyright holder is much easier than worrying about it.

tiggy2 Posted 22 May 2012 , 6:28pm
Quote:
Originally Posted by costumeczar

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Originally Posted by Evoir

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Originally Posted by ladyellam

Scp1127 I just have a quick question to ask you. Did you just make an Old Bay container for your stew cake? I'm sure you got permission to replicate it, correct?




1. Its not her cake.
2. Yes, the decorator in question DID get permission.



that was my cake, and yes, I did get permission. If you want to go to the Old Bay facebook page and look at the "comments posted by other people" area, you'll find my request, their approval, and their comments about how much they liked the cake. icon_smile.gif


thumbs_up.gifthumbs_up.gifthumbs_up.gif

johnson6ofus Posted 22 May 2012 , 8:59pm
Quote:
Originally Posted by Amberwaves

I don't believe there are enough extra people to take the time to go after all the cake copyright infringers that are out there now. .




Yeah, tell that to the cop that only tickets ME and lets 20 other speeders go by. Dumb bad luck, or the "example" case... we just need to be aware.... and the potential penalty for violating the law. Somehow saying. "Yeah, that's the law but I doubt they can catch me..." doesn't seem like a good business plan.

Thanks for the links scp1127!

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