Wal-Mart, French trader face off over Mr. Smiley

World's largest retailer disputes rich investor's rights to a name and symbol of unthinking optimism

May 09, 2006|By ABIGAIL GOLDMAN | ABIGAIL GOLDMAN,LOS ANGELES TIMES

For decades, the yellow happy-face symbol has encouraged millions to smile.

The smiley 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.

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

Wal-Mart Stores Inc., which uses a yellow happy face to try to put its shoppers in a carefree mood, is saying 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 smileys 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.

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, or 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 "smiley," 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 linking its name to the yellow circle with two dots for eyes and a loopy grin, Simley said.

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.

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 $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 it 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 is "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 yellow happy face, ruling that the mark was a widely used decorative symbol. So Loufrani went ahead with a request to trademark the word "smiley" along 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, the Chicago attorney representing Loufrani. "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 the ampersand, trade marking a ubiquitous symbol isn't necessarily frowned on, legal experts said.

Neil Netanel, an expert on copyright and trademark law at the University of California at Los Angeles, noted that apples are ubiquitous but that it didn't stop Apple Computer Inc. from registering its name or famous rainbow-colored trademark. The company took a common word and image, he said, but used it in a new context.

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 retailer.

"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."

Abigail Goldman writes for the Los Angeles Times.

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