NYLJ “Shake Shack Unshaken: Court Limits Typeface Protections in Font License”
By Steve Kramarsky
Intellectual property law is, at its core, a balancing act. On one side is the need to protect new ideas and original works and thus incentivize creativity and innovation. On the other is the need for access to those works and ideas—not only for enjoyment, but because so much of what we consider new is built on what has gone before.
The major intellectual property regimes under U.S. law strike this balance in very different ways. Patent law generally offers very broad protection to novel ideas for a relatively short period of time. Copyright protection lasts far longer, but applies only to a particular unique expression, not the underlying idea, and is subject to various exceptions and limitations on its scope. Trademark and trade secret law rely on their own limitations—whether on the scope or length of protection, the subject matter, or the available remedies—to strike the appropriate balance. Each system has its own quirks and exceptions, and each has evolved over time to keep up with the changing needs of the digital age.
Despite these complex and carefully balanced statutory regimes, parties sometimes want a different set of protections, and they may use contractual arrangements to try to enforce them. For example, copyright law generally provides that a buyer of a copy of a copyrighted work can do what they want that particular copy, as long as they don’t share it or make more copies. That is, once you own a copy of a book or record or computer program (at least on physical media), it is yours to do with as you please. There are exceptions (public display and rental are prohibited, for example) but for the most part copyright law is not concerned with what people do with their own individual copies of works.
That is not typically the balance that software companies want. Microsoft does not want users modifying Word (not even their own copies) nor does it want resales of purchased copies, which copyright law would generally permit. So instead of selling Word, Microsoft (like most large software companies) licenses it. Users do not buy the software; they buy a license to use it subject to the terms of an End User License Agreement (or EULA), which dictates what the rights the user has to the software. In these cases, copyright law may be called upon to enforce the creator’s underlying intellectual property rights, but the EULA comes first.
These arrangements are extremely common—almost all commercial software is now licensed rather than sold—and courts routinely enforce EULAs even where they exclude rights (such as modification and resale) that users would have under copyright law. But is it possible for the EULA to go too far? Microsoft strictly limits what I can do with “my” copy of Word, but it does not attempt to assert control over the documents I create in Word.
That might seem like a bridge too far, but one company had successfully used its EULA in just that way until it was shut down by a Federal Court in New York in December. The case, Shake Shack Enterprises v. Brand Design Company, No. 22 CIV. 7713 (VM), 2023 WL 9003713 (S.D.N.Y. Dec. 28, 2023), offers insight into the limits courts will impose on companies that try to overextend their intellectual property rights.
This article first appeared in the New York Law Journal in January 2024. Stephen M. Kramarsky is a member of Dewey Pegno & Kramarsky, focusing on complex commercial and intellectual property litigation.