I am wondering how this kind of situation is typically handled. I know that if you fail to protect your trademark, others can use it, but the same cannot be said for a copyrighted image. I am sure location also plays a part in the copyright owners rights, but just how exactly does the law handle this in most cases?
Please provide legal precedents (preferably recent and at the highest judicial level you can reference.)
No: Any reproduction or use of intellectual property covered by copyright is presumed to be infringing, unless licensed or protected by exceptions like fair-use. Commercial use of an image as a trademark is definitely not fair use!
You need to realise that the purpose of trademark law and copyright law is absolutely different.
Under trademark law, you create a name, or a logo, that people associate with your company. If they see this logo on a product, they assume that it is your product. If you get a reputation for good products, then your competitors would like to put your logo onto their products, so that people buy them. And that's what trademark law forbids.
There may be very little creativity in a trademark. Take "iPhone". There isn't really much creativity in the name. It's the word "phone", capitalised, preceded by a lowercase letter i. Now compare that with Tolstoy's "War and Peace". 1,200 tightly written pages of literature. That's about a million more times creativity.
Copyright protects the creativity behind "War and Peace". I don't think you would be able to get any copyright protection on "iPhone", because there just isn't enough creativity. But trademark law protects it because the name is printed on millions of products and associated with those products, and that's why Samsung phones are called "Galaxy" and not "iPhone". Because they are not allowed to make their customers believe that they buy an Apple product.
Concerning comments below: In many, many cases, company logos are quite simple. They may be so simple that they wouldn't even fall under copyright protection. The chances that an image that was posted to an art forum (unless it is an art forum specialised in logos) would be used as a company logo and trademarked are minimal. Should that ever happen, then using the trademark is copyright infringement.
But trademarks have a totally different purpose. I can buy a color laser printer and 1000 sheets of paper and print out a million copies of Apple's logo. That's copyright infringement (or maybe not, because I am not sure there is enough creativity to create copyright). And Samsung puts the Apple logo on a million Samsung phones (not going to happen, that would be beyond madness).
If you put an Apple logo on your product, nobody, including Apple, gives a damn that it is copyright infringement. But Apple will kill you in court for trademark violation. And it doesn't have to be a copy. It only has to be similar enough to confuse potential customers.
Perhaps you could use a copyrighted image as a trademark without permission, but you wouldn't want to actually do it. The problems are severe enough that I don't think there would be much actual precedent (because few people would make a good faith attempt to do this sort of thing without violating copyright or trademark laws), but we can still look at the text of the relevant laws.
According to 17 USC 109(a):
Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.
And according to 17 USC 109(c):
Notwithstanding the provisions of section 106(5), the owner of a particular copy lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to display that copy publicly, either directly or by the projection of no more than one image at a time, to viewers present at the place where the copy is located.
So let's say there's an image you want to use, and it's published in a magazine. You can't legally reproduce that image. But you can buy a thousand copies of the magazine and a pair of scissors. You now own a thousand lawfully made copies, and can legally display or sell them.
But as I said, there are severe problems. Your logo will literally just be glued on; you have to use the physical page from the magazine and can't simply print the logo on your packaging or product. You can't use a blown-up or shrunk-down version; you're stuck with whatever size you could find. You can't really modify the copies, as that would mean you'd be creating a derivative work (unless you modify them so much that it becomes a parody or otherwise transformative, in which case it could be fair use.) You can't put the logo on TV, or in newspapers, or on the Internet. It's fairly expensive to buy a magazine for each product you want to sell. And once you run out of copies, you can't make more.
You also could run into trademark-related problems. Depending on the circumstances, the author could argue that you're misleading people into thinking he is associated with your company or product. According to 15 USC 1052(a), if a proposed trademark contains
matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute;
then the registration can be refused.
I wouldn't say it is impossible to get a trademark for an image that you have no copyright for. But if you manage this, then you still have no right to use the image. So you would have a trademark that is of absolutely no use to you.
You would have to hide it from the world carefully because using your own trademark would be copyright infringement. Printing your trademark on a product that sells well would be copyright infringement on a large scale, and the copyright holder could among other things require that you stop selling products with the trademark.
The copyright owner could block the infringing use (cease and desist, court injunction, etc.).
This is because the copyright owner has the exclusive right to reproduce the copyrighted work. This right has been enforced by the United States Supreme Court. See (among many others) Bleistein v. Donaldson Lithographing Co., 188 US 239. In Bleistein, the court held that using a work in advertisement does not block its protection under copyright:
A picture is nonetheless a picture, and nonetheless a subject of copyright, that it is used for an advertisement
The trademark would become abandoned1 (easily provable given an accepted request to cease and desist or a court injunction), and the copyright owner could then use the mark in trade.
A company might decide to use trademark protection in addition to copyright protection for many reasons. I'll list a few: