Intellectual Property – Legal issues with Escape Rooms!!!  Trademarks, Copyrights, and Trade Secrets.

Introduction – what is an escape room?

From what I can tell “Escape Rooms” are gaining momentum across the United States.   If you have never heard of these basically an owner or leasee of property converts into into one or more “rooms” that are essentially rooms where customers (often times a family or a group of friends) goes into the room and needs to figure out a way to “escape” usually within a set time frame (ex. one hour).  To do this, they need to work together and look for clues that will help them crack the code and get out of the room.  This is a really fun, unique, and potentially profitable way to use your real property, especially if you have some old industrial property that is sitting their gathering dust while you pay property tax on it.

But, while it might be tempting to run out and engage a contractor for the remodel job of building out the rooms, there are some important INTELLECTUAL PROPERTY aspects that investors should be aware during the CONTRACT NEGOTIATION STAGE and thereafter.  This blog provides some of my general tips of things to think about.  If you need help negotiating a contract dealing with escape rooms, call us below to discuss or send an email to us at the email address on the right side of this page.

Negotiating the construction contract

The first thing to think about is making sure if you are hiring a contractor to help build out the rooms where the games will be played, you would like to try to see if they will make you something UNIQUE that they are not making for every other company out there.  For example, there are a lot of different types of escape room themes you could construct, for example:

1. Spaceship
2. Laboratory
3. Lockerroom
4. UFO
5. Dungeon
6. Office or Study
7. Haunted house
8. Zombie land

Creating a realistic type of set is about similar to creating a set for a live theater.  You would be creating the look and feel of something unique and trying to make a realistic and believable game environment so the players feel like they are doing something authentic.  This, of course, can be costly, so you want to make sure you are getting all the rights to the final product, and making sure the employee or contractor creating the game environment is assigning you all the rights to the final work product, and if employee, that you make clear it is a “work for hire” (meaning the employer will retain all the intellectual property rights).

Your contract should be properly negotiated and you should make sure you are covered as far as the IP rights are concerned.  If using a contractor and they are making the escape room just for you (exclusive rights to the game, or game name or logos), you want to make sure you get this in writing clearly outlining your legal rights.  For example, what if you pay $200,000 to build out an escape room and the contractor says it is unique and custom to you, but them and goes and takes the idea and sells it to another company (in essence your competitor if they are local to you).

So step one is to always make sure if you are making this type of an investment pay the extra money and get yourself a good business and IP lawyer to help protect your rights at the earliest stage possible.  This is critical in my opinion.

Can you copyright protect your escape room?

Some elements of your escape room concept you may be able to copyrighted with the U.S. Copyright Office, thus seeking to prevent others from copying your idea. For example:

1. The room itself can be considered a “creative work fixed in a tangible medium of expression” and thus you may be able to copyright a photo of the room.  For example, some type of fancy paint job or a room that looks totally unique. Note: you may want to look into seeking “trade dress” protection as well – see below.
2. Any blueprints you created for the room
3. Game play instructions and narratives might not be copyrightable as they are more functional in nature
4. Trailer movies you create (or have created – again, consider hiring a IP lawyer) you may want to file for copyright protection adding another layer of potential protection.
5. Certain props you create may be subject to either copyright or trademark protection
6. Advertisements you create showing what the escape room looks like you may also want to seek a copyright on.
7. Logos for the various games can be copyrighted (and also trademarked)
8. Copyrighted music in your game room might also be subject to copyright and investors are cautioned not to use copyrighted music without the proper clearances.  See below.
9. You may want to consider copyright protecting your blog or website as well.  See Ingrid & Isabel LLC v. Baby Be Mine, LLC, No. 13-cv-01806-JCS, 2014 WL 954656 (N.D. Cal. 2014)
10. Any proprietary software you use to create lighting, sounds, or other special effects may be subject to copyright.

Did you think of any of these things?  If so, that is good.  If not, it may be wise to hire a business/IP attorney as you work through your deal.

What is “Trade Dress” protection for products, props and packaging (and possibly other things)?

Trade Dress can include things like the size, shape, color or color combinations, or graphics in relation to product packaging or restaurant or store atmosphere (think I-hop or 7-11).  Perhaps it can be extended to protect Escape Rooms.

Everyone has seen or heard of Kentucky Fried Chicken.  They have a very unique red and white look and design to each of their restaurants.  This look and feel has been protected by “trade dress” protection (which is usually considered a form of trademark law).  Here is one case that shows you some of the things KFC will protect and seek to enforce through litigation if necessary:

“The Plaintiff has set forth in writing the specifications for the manufacture of the cartons, and one of the most important of these specifications is the thickness of the board from which the cartons are required to be made. The Plaintiff's dinner and crispy chicken cartons are required to be manufactured from board .016′ thick, and the snack cartons are required to be made from .015′ thick board; but a tolerance of plus or minus .001′ is allowed for variances in thickness due to industry-wide tolerances for the manufacture of the board from which they are made. All three sizes of the Plaintiff's cartons display the Plaintiff's five trademarks and five service marks in suit. In addition, they contain the Plaintiff's trade or corporate name ‘KFC Corp.', and they display the red and white stripe trade dress widely used by the Plaintiff on its products, retail stores and in its advertisements. Defendant Container sells cartons in the same three sizes as Plaintiff's cartons, and Defendant Container's cartons contain identical displays of the Plaintiff's red and white striped dress. Defendant's cartons also contain the Plaintiff's trade name ‘KFC Corp.', although Defendant's own name is not on its cartons. The principal distinguishing feature of the Defendant's cartons is that they are made of thinner cardboard than the Plaintiff's, the Defendant's snack cartons being made of .0135′ to .0137′ thick board. The other products in suit are napkins, towelettes and plastic eating utensils. The Plaintiff sells several kinds of napkins, but the napkin involved in this suit is designed for use with ‘take-out' orders where the retail consumer may not have access to other napkins or towels. The Plaintiff's napkin contains its r ed and white striped trade dress and Plaintiff's five trademarks and five service marks in suit. The Plaintiff's napkin measures 17′ X 17′, and is manufactured from one-ply paper with a crepe finish which gives it increased cleansing properties. The Plaintiff sells these napkins separately and in prepacks, while the Defendants only sell napkins in prepacks. At one time the napkins sold by  *1142 Defendants were identical to the Plaintiff's napkins in all particulars, but the napkins presently being sold by the Defendants in prepacks are manufactured from paper without the crepe finish, and Defendants' napkins measure only 10′ X 12′.”

See Kentucky Fried Chicken Corp. v. Diversified Packaging Corp., 376 F. Supp. 1136, 1141–42 (S.D. Fla. 1974), aff'd, 549 F.2d 368 (5th Cir. 1977).

Similarly, if your Escape Room takes on a unique look and feel you might want to look into trade dress as a form of IP protection that will allow you to go after your competitors for unfair competition if they illegally copy your rooms.

Here is some more information on what constitutes protectable trade dress under the Lanham Act:

“The Lanham Act provides for the registration of trademarks, which it defines in § 45 to include “any word, name, symbol, or device, or any combination thereof [used or intended to be used] to identify and distinguish [a producer's] goods from those manufactured or sold by others and to indicate the source of the goods. See 15 U.S.C. § 1127. Registration of a mark under § 2 of the Lanham Act, 15 U.S.C. § 1052, enables the owner to sue an infringer under § 32, 15 U.S.C. § 1114; it also entitles the owner to a presumption that its mark is valid, see § 7(b), 15 U.S.C. § 1057(b), and ordinarily renders the registered mark incontestable after five years of continuous use, see § 15, 15 U.S.C. § 1065. In addition to protecting registered marks, the Lanham Act, in § 43(a), gives a producer a cause of action for the use by any person of “any word, term, name, symbol, or device, or any combination thereof….which….is likely to cause confusion as to the origin, sponsorship, or approval of his or her goods” 15 U.S.C. § 1125(a). It is the latter provision that is at issue in this case. The breadth of the definition of marks registrable under § 2, and of the confusion-producing elements recited as actionable by § 43(a), has been held to embrace not just word marks, such as “Nike,” and symbol marks, such as Nike's “swoosh” symbol, but also “trade dress”—a category that originally included only the packaging, or “dressing,” of a product, but in recent years has been expanded by many Courts of Appeals to encompass the design of a product.  See,  e.g.,  Ashley Furniture Industries, Inc. v. Sangiacomo N. A., Ltd., 187 F.3d 363 (C.A.4 1999) ( bedroom furniture);  Knitwaves, Inc. v. Lollytogs, Ltd., 71 F.3d 996 (C.A.2 1995) ( sweaters);  Stuart Hall Co., Inc. v. Ampad Corp., 51 F.3d 780 (C.A.8 1995) ( notebooks).  NOTE:  this may cover some of your props and potentially some of the set items. These courts have assumed, often without discussion, that  trade  dress constitutes a “symbol” or “device” for purposes of the relevant sections, and we conclude likewise. “Since human beings might use as a ‘symbol' or ‘device' almost anything at all that is capable of carrying meaning, this language, read literally, is not restrictive.”  Qualitex Co. v. Jacobson Products **1343 Co., 514 U.S. 159, 162, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995).

This reading of § 2 and § 43(a) is buttressed by a recently added subsection of § 43(a), § 43(a)(3), which refers specifically to “civil action[s] for trade dress infringement under this chapter for trade dress not registered on the principal register.” 15 U.S.C. § 1125(a)(3) (1994 ed., Supp. V).

The text of § 43(a) provides little guidance as to the circumstances under which unregistered trade dress may be protected. It does require that a producer show that the allegedly infringing feature is not “functional,” see § 43(a)(3), and is likely to cause confusion with the product for which protection is sought, see § 43(a)(1)(A), 15 U.S.C. § 1125(a)(1)(A).

Nothing in § 43(a) explicitly requires a producer to show that its trade dress is distinctive, but courts have universally imposed that requirement, since without distinctiveness the trade dress would not “cause confusion … as to the origin, sponsorship, or approval of [the] goods,” as the section requires. Distinctiveness is, moreover, an explicit prerequisite for registration of trade dress under § 2, and “the general principles qualifying a mark for registration under § 2 of the Lanham Act are for the most part applicable in determining whether an unregistered mark is entitled to protection under § 43(a).”  See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992) (citations omitted).”

See Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 209–10, 120 S. Ct. 1339, 1342–43, 146 L. Ed. 2d 182 (2000).

This case also discussed “distinctiveness” and “secondary meaning” requirements:

“In evaluating the distinctiveness of a mark under § 2 (and therefore, by analogy, under § 43(a)), courts have held that a mark can be distinctive in one of two ways. First, a mark is inherently distinctive if “[its] intrinsic nature serves to identify a particular source.” Ibid. In the context of word marks, courts have applied the now-classic test originally formulated by Judge Friendly, in which word marks that are “arbitrary” (“Camel” cigarettes), “fanciful” (“Kodak” film), or “suggestive” (“Tide” laundry detergent) are held to be inherently  distinctive. See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 10–11 (C.A.2 1976). Second, a mark has acquired distinctiveness, even if it is not inherently distinctive, if it has developed secondary meaning, which occurs when, “in the minds of the public, the primary significance of a [mark] is to identify the source of the product rather than the product itself.” Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 851, n. 11, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982).*

If your escape rooms have unique and distinctive features that identify your company to your consumers, trade dress protection should at least be looked into.  In the world of IP law, you protect all you can.

Using copyrighted music in your escape room

If your escape room is playing music onsite (ex. scary music or clock ticking or whatever it might be), you need to make sure that the music is properly licensed.  We have heard of cases of businesses being used for broadcasting Pandora without a proper commercial license, or other types of music without being properly licensed through performing rights organizations (“PRO”) like ASCAP, BMI, SESAC and SoundExchange.  This could be a very costly mistake as you could face a cease and desist letter, or worse, and action for federal copyright infringement seeking up to $150,000 per willful infringement.  Naturally, this would have the effect of putting many small escape rooms out of business.

What to do if you believe another company is infringing on your room

If you believe your contractor has breached your contract, or an employee has left and stole your puzzle or game ideas or another company has infringed your copyrights, trademarks, or trade dress (or engaged in some other type of act of unfair competition) we can help you analyze the pros and cons of filing a lawsuit.

Is there a Fair Use Defense?

Fair use is one of the popular defenses to copyright infringement law, but we typically tell our clients not to rely on this unless you are 100% sure (which is never an easy task).  Some people think they can use elements or themes from J.K. Howling's Harry Potter

but this could lead to being sued by Warner Brothers or receiving a cease and desist letter for misappropriating things like the “Hogwarts” sign or other protected elements of Harry Potter, of which their are many. So you have to keep this in mind as well when building our your escape room theme and are incorporating props and other artwork.

Damages for Willful Copyright Infringement

Click here to watch our popular video on copyright infringement damages.

Contact an Escape Room Lawyer

We are business and IP law firm with a strong background in real estate law, copyright, trademark and intellectual property.  Contact us for an initial discussion at (877) 276-5084.  There is no cost for the initial call.