"The Australian surfwear brand Billabong has reported much worse than expected results as it continues to try to refinance its debt. It reported a net loss of A$859.5m ($777.8m; £495.1m) for the year ending 30 June, compared with a loss of A$275.6m a year ago. It has written off the value of many of its brands, including cutting the value of the Billabong brand to zero. Its shares fell as much as 15%, having lost more than 60% in the past year.Whatever the reason, if not that the brand is actually and genuinely worthless, this old-fashioned and impractically idealistic blogger remains uncomfortable at the valuation of an intellectual asset at zero. What do other readers feel?
Billabong has been struggling to maintain sales in key markets such as the US and Europe. ... The firm has also been in financial trouble after an international expansion loaded the company with debt [same old story -- undercapitalised, borrrows too much too fast and then chokes -- but a fresh twist, in that money is currently so cheap and has been for the past five years, coinciding with the company's expansion].
... It has closed 158 of the stores it describes as under-performing, sold the DaKine brand [that looked a good deal, clawing back $70 million on a brand lurking somewhere between niche and nonentity] and all but withdrawn from its Nixon joint venture ...".
"Where money issues meet IP rights". This weblog looks at financial issues for intellectual property rights: securitisation and collateral, IP valuation for acquisition and balance sheet purposes, tax and R&D breaks, film and product finance, calculating quantum of damages--anything that happens where IP meets money.
Tuesday, 27 August 2013
Billabong zeroed as surf-and-skate business skids off course
"Billabong reduces the value of its brand to zero" is a surprise headline on today's BBC website. Not because this blogger was expecting to make thumping profit -- which he wasn't -- but because the Billabong brand seemed to him to be the only bit of the business that was worth salvaging on account of its actual and/or potential pulling power in markets beyond Europe and the US. States the article, in relevant part:
Monday, 26 August 2013
Roundtrip for the Luxury Brand: Chinese Tourists Seeking Luxury Brand Discounts at Outlets in the United States
The Sacramento Bee published an article on Sunday, August
25, 2013, authored by Richard Chang, titled, “Big Spenders from China Have Outlet Malls Elated.” The article
discusses the financial impact of Chinese tourists (400 million and growing in
the middle class!) seeking discounted luxury brand goods at outlet malls in the
United States—specifically in California.
An outlet mall is a group of stores located, sometimes, in the same
structure or in a group of structures, with each store, usually, selling one
brand’s merchandise. The brands are
often luxury brands and some popular outlet stores in the United States are
Polo, Nike, Adidas, Brooks Brothers, Coach, Levis and Calvin Klein. The prices are usually discounted. Sometimes the outlet stores carry overstock
or merchandise that has failed to sell in “regular” stores and sometimes the
brands, supposedly, manufacture goods specifically for the outlet stores, which
may be of lesser quality than that sold in “regular” stores. The article states:
The average Chinese visitor spends $3,000 on luxury goods,
according to an analysis by TaxFree Shopping, a company that processes tax
refunds for foreign travelers. That kind of spending has caught the attention
of American retailers and mall operators.
"The Chinese want designer brands, and they want a
bargain. That's why they come to Premium Outlets for our upscale stores,"
Eggan said. . . .
Simon Property Group, owner of 11 outlet malls up and down
California, has aggressively courted Chinese consumers since 2005. Eggan often
travels to China, meeting both officials and tour operators. She was one of 80
business leaders who accompanied Gov. Jerry Brown on a weeklong trade mission
to the Asian giant in April.
With the liberalization of their country's economy in the
1990s, the Chinese have grown accustomed to seeing Western styles and luxury
brands. However, high tariffs make foreign imports extremely expensive, even
though many of them are made in China.
In some cases, Chinese tourists say, the discounts on
merchandise in the United States cover the cost of their trip.
Notably, the article also states
that, “Cora Ip, a recent UC Davis graduate, said her parents – who live in
Sacramento – spend hundreds of dollars buying gifts for relatives back home in
Hong Kong. "When you buy things
here, there is quality control," said Ip . . ..” Cheaper prices and quality control--very nice! (Although, as alluded to before, there are “the dirty secrets of outlet shopping,” including the inconsistent quality between
goods sold in a “regular” store and at an outlet—confused consumers? Post sale confusion?).
Labels:
China,
designer brands,
luxury brands,
Luxury goods,
outlet stores,
Trademarks
Sunday, 25 August 2013
ALCS August Distribution:a glimpse at the bottom end of authors' earnings
The August 2013 issue of the Authors' Licensing and Copyright Society (ALCS) News has now been published. One of the most interesting items this month is entitled "The August Distribution". In brief:
"This month ALCS is paying over £7.5 million to more than 21,000 Members. Here's our guide to the second of this year's two distributions".That works out at around £370 per member -- certainly not enough to live on, and a far cry from the earnings of the world's most commercially successful novelists. Anyway, if you've ever wondered how authors' collecting societies function, this item will shed a little light.
Friday, 23 August 2013
Patents as incentives: when $2 million doesn't sound like very much
A press release from Northwestern University has picked up a tidy sum to do some research the results of which will doubtless interest readers of this weblog. It runs, in relevant part, like this:
"Wireless technologies innovator Qualcomm Incorporated has given the Searle Center at Northwestern University School of Law $2 million to fund research that will investigate the role of patents in incentivizing technological innovation.This blogger hopes that, given the universal applicability of so many technologies in which thickets and stacking are said to exist, the database will not be artificially limited to the market in the United States alone, particularly since the different IP and competition rules in different countries may reflect valuable light on the extent to which technological innovation is chilled or warmed.
“Technology is evolving in an increasingly complex legal environment,” said Matthew Spitzer, director of the Searle Center and the Howard and Elizabeth Chapman Professor.
“Critics claim that patents may, in some cases, limit technological advancement,” he said. “There is a lot of discussion about ‘patent thickets,’ ‘hold-up’ and ‘royalty stacking’ and how these constructs could hinder innovation, but there is surprisingly little actual data out there. Our project will create the needed data sets and allow the critics’ claims to be tested.” [Part of the problem is that there are two types of things we need data on: positive things, like actual events of royalty stacking, and negative events, like businesses not entering a market on the assumed basis that thickets exist or that affordable licences would not be available. Against a budget of only $2 million, getting a reasonable quantity of information about the latter may be a tough job]
The grant will make it possible for the Searle Center to create a series of related databases to collate information regarding standards, licensing, litigation and markets for patents. Scholars will be able to use these data to better understand how inventive activity occurs, how it is commercialized and what might be done to facilitate future innovation. The grant also funds a series of conferences and roundtables to examine and improve research in the field ...".
Wednesday, 21 August 2013
The Recording Industry Has Revenue Growth: The “Sweet Spot” with Licensed Digital Services and New Markets
The International Federation of the Phonographic Industry (IFPI)
has released two reports concerning recorded music. The first is The Recording Industry in
Numbers 2013 Report (RIN 2013) and the second is the Digital Music Report
2013. The RIN 2013 “provides a
comprehensive picture of the key trends in today's global music business, with
in-depth statistics and analysis . . ..”
Some highlights of the RIN 2013 include:
·
Overall global recorded music trade revenues
increased by 0.2% in 2012, the first year of growth since 1999. All the revenue
streams IFPI tracks (physical, digital, performance rights and synchronisation
revenues), with the exception of physical sales, increased in 2012. A total of
21 countries saw market growth in 2012, including nine of the top 20 markets.
·
The world's top 20 markets table shows
that the US remains the world's largest music market; digital sales success in
Sweden has made that country the world's 12th largest music market (up two
places on 2011); India has also moved up the rankings.
·
Digital channels now account for 35% of
overall industry trade revenues, while physical sales now represent 57% of
record companies' income. Downloads remain the biggest source of digital
revenues, with combined unit sales of track and album downloads up by 11% in
2012.
·
Music subscription services are seeing
rapid growth. Music subscription and ad-supported streaming services now
account for 20% of digital revenues globally, up from 14% in 2011. Subscription
and ad-supported revenues combined now account for almost one third (31%) of
all digital music revenues in Europe.
·
Emerging markets are helping fuel the
industry's recovery. Brazil, India and Mexico have seen market growth
respectively of 24%, 42% and 17% since 2008. In 2012 revenues in India reached
an all-time high while Latin America was the fastest growing region of the
year.
·
Albums continue to hold their appeal,
accounting for 56% of recorded music sales value. Digital album downloads grew
faster than singles and vinyl sales hit their highest point since 1997.
Consumer usage on streaming services shows that the album format remains very
relevant. Many of the year's best-selling albums generated a large streaming
volume across all tracks included on the album.
·
Sources of music licensing income are also on
the rise. Performance rights revenues (from broadcasts and public
performance) were the fastest growing sector in the recording industry in 2012,
accounting for 6 per cent of recorded music revenues. Revenues grew by 9.4%
globally, to US$943 million. Income from synchronisation deals - music
used in TV adverts, films and brand partnerships - were also up. These grew by
2.1% to US$337 million in 2012.
The Digital Music Report 2013
highlights include:
·
Download sales increased in volume by 12 per
cent globally in 2012 and represent around 70 per cent of overall digital music
revenues
·
The number of people paying to use subscription
services leapt 44 per cent in 2012 to 20 million. Subscription revenues are
expected to account for more than 10 per cent of digital revenues for the first
time in 2012.
·
Digital channels account for the majority of
record companies' income in an increasing number of markets including India,
Norway, Sweden and the US
·
Digital retailers' rapid global expansion is
opening up the potential for markets such as Brazil and India, to become major
sources of future industry growth. At the start of 2011, the major
international services were present in 23 countries. Two years later, they are
in more than 100 countries.
·
Digital music consumption has become mainstream,
as shown by consumer research by Ipsos MediaCT across nine markets in four
continents. Two-thirds of internet users (62%) have used a licensed digital
music service in the past six months. Among younger consumers (aged 16-24) this
figure jumps to 81 per cent.
·
Consumer satisfaction with licensed music
services is demonstrably high. 77 per cent of users of licensed services rate
them as excellent, very good or fairly good. Even 57 per cent of those who use
unlicensed services believe "there are good services available for legally
accessing digital music."
·
Many non-digital revenue channels are also
increasing. Performance rights income increased in value by an estimated 9.2
per cent in 2012 and now accounts for around 6 per cent of overall industry
revenues, up from 3 per cent in 2007.
·
Album charts in most markets show that
investment in local repertoire is alive and well. In many countries, local
repertoire accounts for the vast majority of the top selling albums of the
year. Five major non-English language markets illustrate this. In Italy, Spain
and Sweden, eight in 10 of the top selling albums of 2012 were by local
artists; in Germany, seven in 10, and in France six in 10.
Saturday, 17 August 2013
“A Kodak Moment” or “Rembrandts in the Attic”: The Valuation for the BlackBerry Patent Portfolio
On the heels of the announcement that BlackBerry would start
looking “at strategic alternatives,” the web has lit up with commentary and speculation on the
value of the BlackBerry patent portfolio—a whopping 5,000 plus patents and almost
4,000 patent applications! (here, here, here and here) And, the
value is – well, $2 billion. Or, maybe
$3 billion. But, well, under some
circumstances could be $5 billion.
Wow. A $2 to $5 billion range? To be fair, these valuations are being made “on
the fly.” I do hope that this time the
folks doing the valuing are taking into account, at least, how extensive the
licensing of the critical patents in the portfolio has been (apparently a
mistake with the Kodak portfolio valuation), the existence of noninfringing
substitutes, the relevant markets, the construction of the claims and potential
prior art not considered by the relevant patent offices. (How much is that analysis going to cost?)
Could the portfolio be a "Rembrandt in the Attic" (or a lot of them)? Again, how extensive has the licensing of the patents been? At least one analysis has pointed out that there is quite a bit of term left on some of the BlackBerry patents. And, in early 2013, Intellectual Asset Management reportedly gave the BlackBerry Patent Portfolio a relatively high rating based on quality and quantity of patents and BlackBerry supposedly has been spending "$1.5 billion to $2 billion" on R&D a year. Here is the Envision IP analysis (and update) of the BlackBerry Patent Portfolio. ThinkFire will release its analysis of the present BlackBerry Patent Portfolio soon. Anyone need a shield or something to trade?
Could the portfolio be a "Rembrandt in the Attic" (or a lot of them)? Again, how extensive has the licensing of the patents been? At least one analysis has pointed out that there is quite a bit of term left on some of the BlackBerry patents. And, in early 2013, Intellectual Asset Management reportedly gave the BlackBerry Patent Portfolio a relatively high rating based on quality and quantity of patents and BlackBerry supposedly has been spending "$1.5 billion to $2 billion" on R&D a year. Here is the Envision IP analysis (and update) of the BlackBerry Patent Portfolio. ThinkFire will release its analysis of the present BlackBerry Patent Portfolio soon. Anyone need a shield or something to trade?
Besides the valuation issue, it will be interesting to see
if the BlackBerry patents are eventually used by so called “patent trolls” to
hold up other entities since BlackBerry (Research in Motion) was such a famous “victim”
of NTP and has been an outspoken critic of "patent trolls." (the sword). Again, anyone need a shield? We shall see how the game plays out.
Tuesday, 13 August 2013
How Important Are Patents for Big Oil?

1. The supermajors are increasingly dependent upon oil reserves that are more difficult to access. "Their size, know-how and experience serve the companies well in such plays," the article observes. However, these companies are expending a greater share of their money "to produce less and less global oil output."The reader will notice a simple, salient fact—the word "patent" does not appear even once in the article. However, the article refers to "know-how" in various places, as summarized above. There seem to be two possible explanations for this. First, the piece is lumping patents and know-how together under the rubric "know-how" (maybe poetic licence, maybe poetic oversight). Secondly, the report is accurately describing the IP position of the supermajors, at least in connection with their continuing ability to discover, produce and sell substantial quantities of oil. As such, the ultimate IP strength of these companies lies more in their collective know-how rather than in their patent portfolios.
2. Growth in demand, if it is to happen, will take place in the emerging world. However, efficiencies in vehicle performance and the availability of alternatives mean that demand for oil for will not materially increase, if at all.
3. Moreover, so-called "national oil companies" (NOC) now make up six out of the ten largest oil companies in the world. As reported, "[s]ome of the NOCS still lack the know-how and the capital to get to their oil on their own, and thus seek out supermajors to help. ….But others can do everything for themselves …, they have learned what the supermajors have to teach them."
4. In addition, the NOCs are acting increasingly like oilfield service companies (think Haliburton or Schlumberger). Indeed, some are supporting in-house service-like firms "to offer other NOCs the know-how that once came from the big international oil companies."
5. According to the article, the supermajors have few viable options short of slimming down (becoming "smaller, fitter oil firms"). That said, "[r]eviving unique in-house technology might help."
I do not have sufficient information about the oil industry to decide independently which of the two explanations is correct. That said, my natural preference (indeed intellectual reflex) is to assume that the article is accurate, and that it says what it means. Based on that assumption, my conclusion under the circumstances is that patents take a back seat to trade secrets and know-how in determining the overall IP contribution to these companies. This observation is not insignificant. In addressing IP management, there is a tendency to assume the "natural" primacy of patents. When is the last time that anyone of exalted rank ever approached know-how as worthy of much attention? To the contrary, attention to patent issues seem everywhere, whether the White House issuing a report on patent trolls and non-practising entities, here or the President overturning a trade ban recommended by the U.S. International Trade Commission on certain Apple smartphone because of patent infringement, here. Seemingly every where you look (or listen), when you talk IP, you necessarily mean "patents."
However, in summarizing the state of the oil supermajors, no explicit attention to patents is made. Rather, it is the accumulated proprietary knowledge and wisdom of these companies and the competencies that flow from such know-how, which is crucial. Presumably, when The Economist suggests that the supermajors would be well-advised to develop some "unique in-house technology", this reference is to know-how in its broadest sense, rather than a sudden surge in the size of these companies' patent portfolios. If so, then IP management literature on an industry such as oil (far from the spotlight of mobile connectivity) seems wanting. What we really need is increased attention to the nuanced relationship between patents and know-how in various settings. After all, when is the last time that we read of a patent-troll going after an Exxon or Royal Dutch Shell?
Saturday, 10 August 2013
President Obama’s Legacy: An “Innovation Deficit” or Greater Wealth (and wider distribution)?
When we look back at Obama’s presidency, my guess is that he
will be known for several things. He’ll
be remembered for health care reform and as the President of “The Great
Recession,” and maybe even the end of Osama Bin Laden (hopefully, also immigration reform). I doubt that everyone will remember that he
inherited the financial mess that was “The Great Recession.” I also doubt he’ll be remembered for creating
manufacturing hubs, the American Invents Act (except amongst patent lawyers), fighting
“patent trolls,” and starting an initiative to research the human brain. But, he could be remembered for creating the “Innovation
Deficit.” What is the “Innovation
Deficit?” Basically, it is low federal
spending on education and specifically on research and development (R&D) in light of increased spending on R&D by
global competitors.
The U.S. budget for FY 2015 is being prepared and
universities are worried (as we all should be).
Last week, 165 university presidents in the United States sent an open
letter to President Obama and Congress urging continued strong funding for
education, here. The letter is part of
an effort led by the Association of American Universities and the Association of Public and Land-Grant Universities, see www.innovationdeficit.org. The website includes a fact sheet outlining the
“Innovation Deficit.” It states:
·
Over the last ten years, U.S. R&D
expenditures as a share of economic output have remained nearly constant in the
U.S., but have increased by nearly 50% in South Korea and nearly 90% in China.
(Source: NSF S&E Indicators 2012, Figure O-3)
·
From 1996 to 2007, R&D expenditures in the
U.S. grew by an average of 5.8% annually. During the same time period,
China’s average annual growth was 21.9%. During the first year of the
economic slowdown (2008-09), U.S. expenditures decreased slightly while China’s
increased by 27%. (Source: NSF Indicators Figure O-4 and Overview)
·
Between 2000 and 2008, the number of engineering
doctorates awarded in China more than tripled to 15,000. This compared to
a total of 8,100 in the United States, of which only about 3,200 went to U.S.
citizens and permanent residents. (Source: NSF Indicators Figure O-10)
·
According to the OECD, government R&D spending
between 2000 and 2009 increased by 250% in Korea and 330% in China; U.S.
government R&D spending increased by about 45% during the same period.
·
From 1987 to 2008, federal R&D investment
grew at just 0.3 percent per year in inflation-adjusted dollars—much lower than
its 4.9-percent average annual growth rate from 1953 to 1987—and ten times
lower than the rate of GDP growth over that period. (Source: http://www2.itif.org/2012-leadership-in-decline.pdf)
·
The United States spent up to 17 percent of
discretionary spending on R&D during the 1960’s, in part due to the space
program, which resulted in a great deal of spinoff innovation; in recent years,
outlays have fallen to around 9 percent of the federal discretionary budget. (Source:
http://innovationtaskforce.org/docs/Benchmarks%20-%202012.pdf)
·
In 2008, China awarded 1 million first
university degrees in natural sciences and engineering, up from 280,000 in
2000. That same year, the total number of first university degrees in natural
sciences and engineering awarded in South Korea, Taiwan, and Japan (330,000)
exceeded the 248,000 earned by U.S. students, despite the considerably larger
U.S. population. (Source: NSF Indicators p. O-7)
·
The proportion of U.S. Patent and Trademark
Office patent grants given to U.S. entities declined from 55% in 1995 to less
than half in 2010. (Source: NSF S&E Indicators 2012, Appendix Table 6-45)
·
The percentage of U.S. gross domestic
expenditures on R&D funded by the government declined from 47.1% in
1981 to 33.4% in 2011. The U.S. trails nine OECD nations in this percentage. (Source:
OECD)
These statistics paint a disturbing picture—especially if
this trend continues. And, if you examine
the preview document prepared by the Association of University TechnologyManagers (AUTM) titled, “American Universities: Unsung Heroes of the Economic Recovery” (August 5, 2013) that may provide a clue to the solution to a slow
growing economy, you may become even more concerned.
The AUTM document provides a glimpse at the upcoming Annual Licensing
Survey that will be released in full in December of 2013. The preview document states that:
Institutions responding to the survey reported $36.8 billion
in net product sales from licensed technologies in fiscal year 2012. In
addition, startup companies formed by 70 institutions employed 15,741 full-time
employees. This was the second year in which AUTM asked questions specifically
targeted at ascertaining the economic impact of academic technology
transfer.
"When people think about job creation, they don't
typically think about universities, but the data show that universities
substantially contribute to the creation of new jobs in this country,"
adds Flanigan.
Highlights of the AUTM U.S. Licensing Activity Survey: FY2012 include:
22,150 total U.S. patent applications filed (+11.3%)[;] 14,224
new patent applications filed (+7.2%)[;] 5,145 issued U.S. patents (+9.5%)[;] 5,130
licenses executed (+4.7%)[;] 1,242 options executed (+7%)[;] 483 executed
licenses containing equity (+16.1%)[;] Total license income: $2.6 billion
(+6.8%)[;] 705 startup companies formed (+5.1%)[; and] 4,002 startups still
operating as of the end of FY2012 (+1.9%).
Back in 2001 when President George W. Bush first took office, I remember reading an article about how his administration
planned to cut federal spending on R&D.
I remember thinking someone needs to get educated about what is
happening with federal R&D funding because they are going to make a big
mistake (for many reasons). Within a few weeks, the Bush
Administration announced that they were not going to cut spending in that
area. I hope we find the Obama
Administration pushing hard for more spending on R&D. We need to "feed that Pig."
Let’s assume that we do the right
thing and "feed the Pig." Could the
Obama Administration do more than just provide federal funding for R&D? One idea that has been floated has been the
creation of a federal system of universities, “India’s Bold Solution to the US College Crisis: Federal Universities.”
This is an intriguing idea that may inject some needed “umpf” into the
U.S. university system for R&D.
Perhaps the federal universities could be built around specific
technologies—places where innovation could quickly take place in a system that
quite rationally does not change quickly.
As I blogged about before, perhaps something like the Cornell project in NYC, but without a lot of baggage. Greater wealth—and
maybe some help for wider distribution of it. Something
to think about.
Labels:
AUTM,
R&D,
Research and development,
U.S. budget,
universities,
university technology transfer
Friday, 9 August 2013
Keeping Tabs on “Patent Trolls”: "Trolling Effects"
The Electronic Frontier Foundation recently released its “Trolling Effects” website. The purpose of the
website is to collect information, specifically cease and desist letters
[C&D letters] sent by “patent trolls,” and provide a “one-stop shop” for
resources concerning “patent trolls” and their impact on the patent
system. Unlike the somewhat similar
Chilling Effects Clearinghouse website, which collects C&D letters across
the IP disciplines, but particularly copyright C&D letters, “Trolling
Effects” is specifically aimed at “patent trolls.”
The Chilling Effects Clearinghouse website, in addition to its
database of C&D letters, provides advice concerning intellectual property
law for folks who receive C&D letters and offers a “weather report” on the
chilling effect of intellectual property law enforcement on the Internet. Notably, the Chilling Effects Clearinghouse
website has provided a source of C&D letters that allow interested parties
to find potential abusive cease and desist letters to “shame” intellectual
property owners who may attempt to stop lawful activity through overreaching
claims. The “Trolling Effects” website
is designed to help figure out who exactly are the “patent trolls.” The blog at the website states:
The new site will
gather information that's usually kept secret and put it to two important uses:
- Give those
facing troll threats information about the specific threats (including who
is really sending them), along with general information about patent law
and the system that might help them navigate the legal process and better
understand their options.
- Collect
sorely needed data for journalists, academics, and policy makers, helping
them better understand the scope of the patent troll problem and allowing
them to make a better case for real reform.
In a very short period of time, the website has already collected a number of C&D letters. Any opinions on how effective the Chilling
Effects Clearinghouse website has been? Will “Trolling Effects” be as or more effective?
Saturday, 3 August 2013
A Need for Trademark Bullies (or at least more trademark enforcement)?
"Patent troll," "copyright troll," and "trademark
bully" are labels with generally negative connotations. Most may say that
we need less of all of the above, including less enforcement by these
"evil doers." However, defining exactly what might fit in one of the
above categories can be challenging. In some ways, it is like telling my
children that people are not bad, but may engage in bad behavior. For example,
Professor Lemley explores the conduct of some universities in a thought
provoking article with the provocative title "Are
Universities Patent Trolls?".
Interestingly, with so called "trademark bullies," a definition has been very elusive although some may say a trademark bully is an entity with a lot of resources enforcing a trademark against an entity with less resources (usually by a substantial amount) with a trademark theory that is either unsupported by trademark law or is a bit of a stretch. And even more interestingly, when one searches for trademark cease and desist letters posted on the Chilling Effects Clearinghouse website, that collects cease and desist letters, a vast majority of the letters are posted by Google--the apparent victim of bullying. Leaving aside the definitional issues involving trademark bullies, there is a space where there appears to be a need for more trademark enforcement--not less. That space involves nonprofits.
A few years ago, the well-known and well respected nonprofit Susan G. Komen For the Cure received some not so positive press about its enforcement of "for the cure" against other nonprofits--specifically smaller nonprofits. It was essentially labeled an evil "trademark bully." But, do we need more of that? A recent study and article by CNN, Tampa Bay Times and the Center For Investigative Reporting, outlines the 50 worst charities in the United States and discusses an apparent tactic of some "bad" charities that choose trademarks similar to respected charities and use telemarketers to secure donations--most of which never reach the intended beneficiaries. The article states:
Why isn't there more trademark enforcement in this space? Is it because of the Komen problem where the nonprofit can look very bad very quickly depending on who they choose to enforce their mark against? Do we need more "bullies" and less shame here? An interesting 2013 article "Trademarks for the Cure: Why Nonprofits Need Their Own Set of Trademark Rules" by Lauren Behr in the 54th volume of the Boston College Law Review explores whether nonprofits need special trademark rules.
Interestingly, with so called "trademark bullies," a definition has been very elusive although some may say a trademark bully is an entity with a lot of resources enforcing a trademark against an entity with less resources (usually by a substantial amount) with a trademark theory that is either unsupported by trademark law or is a bit of a stretch. And even more interestingly, when one searches for trademark cease and desist letters posted on the Chilling Effects Clearinghouse website, that collects cease and desist letters, a vast majority of the letters are posted by Google--the apparent victim of bullying. Leaving aside the definitional issues involving trademark bullies, there is a space where there appears to be a need for more trademark enforcement--not less. That space involves nonprofits.
A few years ago, the well-known and well respected nonprofit Susan G. Komen For the Cure received some not so positive press about its enforcement of "for the cure" against other nonprofits--specifically smaller nonprofits. It was essentially labeled an evil "trademark bully." But, do we need more of that? A recent study and article by CNN, Tampa Bay Times and the Center For Investigative Reporting, outlines the 50 worst charities in the United States and discusses an apparent tactic of some "bad" charities that choose trademarks similar to respected charities and use telemarketers to secure donations--most of which never reach the intended beneficiaries. The article states:
The nation's worst charities are large and small. Some are one-person
outfits operating from run-down apartments. Others claim hundreds of employees
and a half-dozen locations around the country. One lists a UPS mail box as its
headquarters address.
Several play off the names of well-known organizations, confusing donors.
Among those on the Times/CIR list are Kids Wish Network, Children's Wish
Foundation International and Wishing Well Foundation. All of the names sound
like the original, Make-A-Wish, which does not hire professional telemarketers.
Make-A-Wish officials say they've spent years fielding complaints from
people who were solicited by sound-a-like charities.
"While some of the donations go elsewhere, all the bad public
relations that comes with telemarketing seems to come to us," said
Make-A-Wish spokesman Paul Allvin.
Donors who answer calls from the 50 worst charities hear professionally
honed messages, designed to leverage popular causes and hide one crucial fact: Almost
nothing goes to charity.
Why isn't there more trademark enforcement in this space? Is it because of the Komen problem where the nonprofit can look very bad very quickly depending on who they choose to enforce their mark against? Do we need more "bullies" and less shame here? An interesting 2013 article "Trademarks for the Cure: Why Nonprofits Need Their Own Set of Trademark Rules" by Lauren Behr in the 54th volume of the Boston College Law Review explores whether nonprofits need special trademark rules.
Labels:
charities,
nonprofits,
patent trolls,
trademark bullies,
Trademark bully,
trolls
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