MarkIt to Market® - July 2020: Font Software Licensing – "Sans" Disparagement Clause

Sterne, Kessler, Goldstein & Fox P.L.L.C.

Sterne, Kessler, Goldstein & Fox P.L.L.C.

[co-author: Patrick de la Peña, Law Student]

Multinational investment bank and financial services company Goldman Sachs made headlines last month with the introduction of its proprietary, but free-to-use, “Goldman Sans” typeface. The royalty-free, nonexclusive, and revocable license attached to the free-to-download font software granted the user the right to use, reproduce, and distribute unmodified copies of the software – but, as noted among many news sources, the license included a notable term that “the user may not use the Licensed Font Software to disparage or suggest any affiliation with or endorsement by Goldman Sachs.”

Putting aside whether the anti-disparagement license term may be enforceable, it may surprise some that font is afforded intellectual property protection at all. In fact, the Copyright Act explicitly bars “typeface as typeface” from copyright protection in 37 CFR § 202.1. However, a computer program that creates or uses certain typeface or typefont designs (i.e., “font”) can be protected by copyright – although that protection typically only extends to the underlying source code that generates these designs and not to the typeface itself. Font programs can also be the subject of design patents, although the threshold requirement for obtaining a design patent (novelty and non-obviousness) is a larger hurdle than the original work of authorship requirement in copyright. In addition, a design patent provides a 15-year protection term from the date of grant, while copyright protection can afford protection for a term of up to 120 years from the year of its creation (in the case of works made for hire).

Although the body of font license case law is not a large one, we may see this area develop as more large companies unveil their own custom typefaces. In just the last decade, tech giants such as Netflix, PayPal, and YouTube have introduced custom typefaces, in addition to other notable companies like Airbnb and BBC. These custom typefaces not only serve to boost these brands’ customer recognition and goodwill, but can also cut the costs these corporations would otherwise pay to license fonts from third-party designers or companies.

As to that controversial Goldman Sans license restriction, it was certainly a creative tactic for restricting negative commentary about its brand rendered in its own distinctive font, and Goldman Sachs may not be the last company to try to use contract terms to accomplish this goal. However, Goldman Sachs has since removed the disparagement clause from its license – the relevant section is now limited to a notice that the user “may not use the Licensed Font Software to suggest any affiliation with or endorsement by Goldman Sachs.” In any scenario, the Goldman Sans font story is a good reminder that creativity and vigilance are important components of any intellectual property enhancement strategy.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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