Don’t make unauthorized use of a company logo.  That’s one of the lessons of A. Charles Peruto Jr. vs Catalyst Outdoor Advertising.   Here are the facts.

• Attorney Charles Peruto filed a lawsuit versus Santander bank over a $267,000 prepayment penalty on a loan.  The lawsuit was dismissed.
• Peruto wished to pressure Santander to enter negotiations with a public ad campaign.  He asked Catalyst Outdoor to run an advertisement which said “Santander: The Bank that  robs you.”  The ad artwork included the Santander logo.
• Catalyst agreed to a one month digital billboard ad contract for $25,000.  The ad was displayed on November 4, 2016.
• On November 5, 2016 an attorney for Santander bank informed Mr Peruto that he was subject to a fine of $250,000 per day for making unauthorized use of the Santander logo.  Peruto called Catalyst and asked for the billboard to be taken down.  The ad ran for a total of 3 days.

Insider’s take:  It can be expensive to make unauthorized use of another company’s logo.   Make sure your sales contracts have language requiring advertisers to represent that they have authority to use any trademarks or logos.  Your contracts should also indemnify you from expenses associated with an advertisers failure to comply. Here are three versions of language addressing the issues.

Advertiser shall furnish acceptable artwork to Company in a timely fashion. Company may refuse or withdraw any ad copy which in its reasonable opinion is considered unlawful, objectionable or in violation of a land lease.  Advertiser represents that it has the authority to use any trademark, logo or copyrighted material used in the display.

or

Advertiser agrees to hold Company harmless against all copyright or trademark infringement actions arising out of the content of the advertising copy furnished by the Advertiser. 

and here’s the language in the OAAA’s best practices bulletin contract:

Agency and Advertiser will hold Company harmless against all liability, including, without limitation, claims, demands, debts, obligations or changes, together with reasonable attorneys’ fees and disbursements arising out of a breach by Agency and/or Advertiser of this contract or arising out of the content of the advertising materials, art or copy furnished by Agency or Advertiser.

Another issue in Peruto v Catalyst concerned whether a contract is collectible in full when an ad comes down only a few days into term.  We’ll address that in a future post.

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